Correlation Between Raiffeisen Bank and Foreign Trade

Can any of the company-specific risk be diversified away by investing in both Raiffeisen Bank and Foreign Trade at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Raiffeisen Bank and Foreign Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Raiffeisen Bank International and Foreign Trade Bank, you can compare the effects of market volatilities on Raiffeisen Bank and Foreign Trade and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Raiffeisen Bank with a short position of Foreign Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raiffeisen Bank and Foreign Trade.

Diversification Opportunities for Raiffeisen Bank and Foreign Trade

0.18

Correlation Coefficient

Raiffeisen Bank  Foreign Trade

Average diversification

The 3 months correlation between Raiffeisen and Foreign is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Raiffeisen Bank International and Foreign Trade Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foreign Trade Bank and Raiffeisen Bank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Raiffeisen Bank International are associated (or correlated) with Foreign Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foreign Trade Bank has no effect on the direction of Raiffeisen Bank i.e., Raiffeisen Bank and Foreign Trade go up and down completely randomly.

Pair Corralation between Raiffeisen Bank and Foreign Trade

Assuming the 90 days horizon Raiffeisen Bank is expected to generate 2.12 times less return on investment than Foreign Trade. In addition to that, Raiffeisen Bank is 2.37 times more volatile than Foreign Trade Bank. It trades about 0.03 of its total potential returns per unit of risk. Foreign Trade Bank is currently generating about 0.14 per unit of volatility. If you would invest  3,165  in Foreign Trade Bank on September 25, 2024 and sell it today you would earn a total of  414.00  from holding Foreign Trade Bank or generate 13.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Raiffeisen Bank International  vs.  Foreign Trade Bank

Raiffeisen Bank Inte

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Raiffeisen Bank International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Raiffeisen Bank is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Foreign Trade Bank

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Foreign Trade Bank are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady essential indicators, Foreign Trade showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Raiffeisen Bank and Foreign Trade

The main advantage of trading using opposite Raiffeisen Bank and Foreign Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raiffeisen Bank position performs unexpectedly, Foreign Trade can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Foreign Trade will offset losses from the drop in Foreign Trade's long position.

The idea behind Raiffeisen Bank International and Foreign Trade Bank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.