Correlation Between United States and Rigolleau

Can any of the company-specific risk be diversified away by investing in both United States and Rigolleau 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 United States and Rigolleau into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between United States Steel and Rigolleau SA, you can compare the effects of market volatilities on United States and Rigolleau 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 United States with a short position of Rigolleau. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Rigolleau.

Diversification Opportunities for United States and Rigolleau

-0.5

Correlation Coefficient

United States  Rigolleau

Very good diversification

The 3 months correlation between United and Rigolleau is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Rigolleau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rigolleau SA and United States 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 United States Steel are associated (or correlated) with Rigolleau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rigolleau SA has no effect on the direction of United States i.e., United States and Rigolleau go up and down completely randomly.

Pair Corralation between United States and Rigolleau

Given the investment horizon of 90 days United States Steel is expected to generate 1.65 times more return on investment than Rigolleau. However, United States is 1.65 times more volatile than Rigolleau SA. It trades about 0.09 of its potential returns per unit of risk. Rigolleau SA is currently generating about 0.11 per unit of risk. If you would invest  287,550  in United States Steel on September 13, 2024 and sell it today you would earn a total of  959,950  from holding United States Steel or generate 333.84% return on investment over 90 days.

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

United States Steel  vs.  Rigolleau SA

United States Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United States Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Rigolleau SA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rigolleau SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Rigolleau sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United States and Rigolleau

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

The idea behind United States Steel and Rigolleau SA 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.

Check out your portfolio center.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.