Correlation Between Ringmetall and CSL

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

By analyzing existing cross correlation between Ringmetall SE and CSL Limited, you can compare the effects of market volatilities on Ringmetall and CSL 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 Ringmetall with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ringmetall and CSL.

Diversification Opportunities for Ringmetall and CSL

0.09

Correlation Coefficient

Ringmetall  CSL

Significant diversification

The 3 months correlation between Ringmetall and CSL is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ringmetall SE and CSL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL Limited and Ringmetall 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 Ringmetall SE are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL Limited has no effect on the direction of Ringmetall i.e., Ringmetall and CSL go up and down completely randomly.

Pair Corralation between Ringmetall and CSL

Assuming the 90 days trading horizon Ringmetall is expected to generate 2.82 times less return on investment than CSL. In addition to that, Ringmetall is 1.8 times more volatile than CSL Limited. It trades about 0.01 of its total potential returns per unit of risk. CSL Limited is currently generating about 0.07 per unit of volatility. If you would invest  13,618  in CSL Limited on April 24, 2025 and sell it today you would earn a total of  870.00  from holding CSL Limited or generate 6.39% return on investment over 90 days.

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

Ringmetall SE  vs.  CSL Limited

Ringmetall SE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ringmetall SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Ringmetall is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

CSL Limited

Risk-Adjusted Performance

Modest

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

Pair Trading with Ringmetall and CSL

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

The idea behind Ringmetall SE and CSL Limited 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.