Correlation Between Rheinmetall and ASPEN PHARUNADR

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

By analyzing existing cross correlation between Rheinmetall AG and ASPEN PHARUNADR 1, you can compare the effects of market volatilities on Rheinmetall and ASPEN PHARUNADR 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 Rheinmetall with a short position of ASPEN PHARUNADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rheinmetall and ASPEN PHARUNADR.

Diversification Opportunities for Rheinmetall and ASPEN PHARUNADR

-0.47

Correlation Coefficient

Rheinmetall  ASPEN PHARUNADR

Very good diversification

The 3 months correlation between Rheinmetall and ASPEN is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Rheinmetall AG and ASPEN PHARUNADR 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASPEN PHARUNADR 1 and Rheinmetall 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 Rheinmetall AG are associated (or correlated) with ASPEN PHARUNADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASPEN PHARUNADR 1 has no effect on the direction of Rheinmetall i.e., Rheinmetall and ASPEN PHARUNADR go up and down completely randomly.

Pair Corralation between Rheinmetall and ASPEN PHARUNADR

Assuming the 90 days trading horizon Rheinmetall AG is expected to generate 1.07 times more return on investment than ASPEN PHARUNADR. However, Rheinmetall is 1.07 times more volatile than ASPEN PHARUNADR 1. It trades about 0.16 of its potential returns per unit of risk. ASPEN PHARUNADR 1 is currently generating about 0.05 per unit of risk. If you would invest  135,368  in Rheinmetall AG on April 24, 2025 and sell it today you would earn a total of  40,982  from holding Rheinmetall AG or generate 30.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Rheinmetall AG  vs.  ASPEN PHARUNADR 1

Rheinmetall AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rheinmetall AG are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain primary indicators, Rheinmetall sustained solid returns over the last few months and may actually be approaching a breakup point.

ASPEN PHARUNADR 1

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ASPEN PHARUNADR 1 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ASPEN PHARUNADR may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Rheinmetall and ASPEN PHARUNADR

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

The idea behind Rheinmetall AG and ASPEN PHARUNADR 1 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.