Correlation Between Raiffeisen Bank and SAB Finance

Can any of the company-specific risk be diversified away by investing in both Raiffeisen Bank and SAB Finance 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 SAB Finance 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 SAB Finance as, you can compare the effects of market volatilities on Raiffeisen Bank and SAB Finance 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 SAB Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raiffeisen Bank and SAB Finance.

Diversification Opportunities for Raiffeisen Bank and SAB Finance

-0.32

Correlation Coefficient

Raiffeisen Bank  SAB Finance

Very good diversification

The 3 months correlation between Raiffeisen and SAB is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Raiffeisen Bank International and SAB Finance as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAB Finance as 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 SAB Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAB Finance as has no effect on the direction of Raiffeisen Bank i.e., Raiffeisen Bank and SAB Finance go up and down completely randomly.

Pair Corralation between Raiffeisen Bank and SAB Finance

Assuming the 90 days trading horizon Raiffeisen Bank International is expected to generate 2.9 times more return on investment than SAB Finance. However, Raiffeisen Bank is 2.9 times more volatile than SAB Finance as. It trades about 0.02 of its potential returns per unit of risk. SAB Finance as is currently generating about -0.04 per unit of risk. If you would invest  45,550  in Raiffeisen Bank International on August 31, 2024 and sell it today you would earn a total of  450.00  from holding Raiffeisen Bank International or generate 0.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Raiffeisen Bank International  vs.  SAB Finance as

Raiffeisen Bank Inte

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Raiffeisen Bank International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward indicators, Raiffeisen Bank is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

SAB Finance as

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SAB Finance as has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, SAB Finance is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Raiffeisen Bank and SAB Finance

The main advantage of trading using opposite Raiffeisen Bank and SAB Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raiffeisen Bank position performs unexpectedly, SAB Finance 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 SAB Finance will offset losses from the drop in SAB Finance's long position.

The idea behind Raiffeisen Bank International and SAB Finance as 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.