Correlation Between ONEOK and Volkswagen
Can any of the company-specific risk be diversified away by investing in both ONEOK and Volkswagen 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 ONEOK and Volkswagen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONEOK Inc and Volkswagen AG Non Vtg, you can compare the effects of market volatilities on ONEOK and Volkswagen 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 ONEOK with a short position of Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONEOK and Volkswagen.
Diversification Opportunities for ONEOK and Volkswagen
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ONEOK and Volkswagen is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding ONEOK Inc and Volkswagen AG Non Vtg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG Non and ONEOK 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 ONEOK Inc are associated (or correlated) with Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG Non has no effect on the direction of ONEOK i.e., ONEOK and Volkswagen go up and down completely randomly.
Pair Corralation between ONEOK and Volkswagen
Assuming the 90 days trading horizon ONEOK is expected to generate 6.9 times less return on investment than Volkswagen. But when comparing it to its historical volatility, ONEOK Inc is 1.29 times less risky than Volkswagen. It trades about 0.03 of its potential returns per unit of risk. Volkswagen AG Non Vtg is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 8,708 in Volkswagen AG Non Vtg on October 16, 2024 and sell it today you would earn a total of 420.00 from holding Volkswagen AG Non Vtg or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
ONEOK Inc vs. Volkswagen AG Non Vtg
Performance |
| Timeline |
| ONEOK Inc |
| Volkswagen AG Non |
ONEOK and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONEOK and Volkswagen
The main advantage of trading using opposite ONEOK and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONEOK position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| ONEOK vs. mobilezone holding AG | ONEOK vs. Electronic Arts | ONEOK vs. Mobile Tornado Group | ONEOK vs. Zegona Communications Plc |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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