Correlation Between Rai Way and Dolby Laboratories

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

By analyzing existing cross correlation between Rai Way SpA and Dolby Laboratories, you can compare the effects of market volatilities on Rai Way and Dolby Laboratories 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 Rai Way with a short position of Dolby Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rai Way and Dolby Laboratories.

Diversification Opportunities for Rai Way and Dolby Laboratories

-0.3

Correlation Coefficient

Rai Way  Dolby Laboratories

Very good diversification

The 3 months correlation between Rai and Dolby is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Rai Way SpA and Dolby Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolby Laboratories and Rai Way 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 Rai Way SpA are associated (or correlated) with Dolby Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolby Laboratories has no effect on the direction of Rai Way i.e., Rai Way and Dolby Laboratories go up and down completely randomly.

Pair Corralation between Rai Way and Dolby Laboratories

Assuming the 90 days horizon Rai Way SpA is expected to generate 1.37 times more return on investment than Dolby Laboratories. However, Rai Way is 1.37 times more volatile than Dolby Laboratories. It trades about 0.07 of its potential returns per unit of risk. Dolby Laboratories is currently generating about -0.02 per unit of risk. If you would invest  544.00  in Rai Way SpA on April 25, 2025 and sell it today you would earn a total of  35.00  from holding Rai Way SpA or generate 6.43% return on investment over 90 days.

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

Rai Way SpA  vs.  Dolby Laboratories

Rai Way SpA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rai Way SpA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Rai Way may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Dolby Laboratories

Risk-Adjusted Performance

Weak

Over the last 90 days Dolby Laboratories has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Dolby Laboratories is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Rai Way and Dolby Laboratories

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

The idea behind Rai Way SpA and Dolby Laboratories 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.