Correlation Between Thyssenkrupp and Bunzl PLC
Can any of the company-specific risk be diversified away by investing in both Thyssenkrupp and Bunzl PLC 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 Thyssenkrupp and Bunzl PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thyssenkrupp AG ON and Bunzl PLC, you can compare the effects of market volatilities on Thyssenkrupp and Bunzl PLC 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 Thyssenkrupp with a short position of Bunzl PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thyssenkrupp and Bunzl PLC.
Diversification Opportunities for Thyssenkrupp and Bunzl PLC
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thyssenkrupp and Bunzl is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Thyssenkrupp AG ON and Bunzl PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunzl PLC and Thyssenkrupp 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 Thyssenkrupp AG ON are associated (or correlated) with Bunzl PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunzl PLC has no effect on the direction of Thyssenkrupp i.e., Thyssenkrupp and Bunzl PLC go up and down completely randomly.
Pair Corralation between Thyssenkrupp and Bunzl PLC
Assuming the 90 days trading horizon Thyssenkrupp AG ON is expected to under-perform the Bunzl PLC. In addition to that, Thyssenkrupp is 2.41 times more volatile than Bunzl PLC. It trades about -0.04 of its total potential returns per unit of risk. Bunzl PLC is currently generating about 0.12 per unit of volatility. If you would invest 295,273 in Bunzl PLC on September 1, 2024 and sell it today you would earn a total of 58,327 from holding Bunzl PLC or generate 19.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thyssenkrupp AG ON vs. Bunzl PLC
Performance |
| Timeline |
| Thyssenkrupp AG ON |
| Bunzl PLC |
Thyssenkrupp and Bunzl PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thyssenkrupp and Bunzl PLC
The main advantage of trading using opposite Thyssenkrupp and Bunzl PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thyssenkrupp position performs unexpectedly, Bunzl PLC 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 Bunzl PLC will offset losses from the drop in Bunzl PLC's long position.| Thyssenkrupp vs. Uniper SE | Thyssenkrupp vs. Mulberry Group PLC | Thyssenkrupp vs. London Security Plc | Thyssenkrupp vs. Triad Group PLC |
| Bunzl PLC vs. Samsung Electronics Co | Bunzl PLC vs. Samsung Electronics Co | Bunzl PLC vs. Hyundai Motor | Bunzl PLC vs. Toyota Motor Corp |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |