Correlation Between Volkswagen and Ecclesiastical Insurance
Can any of the company-specific risk be diversified away by investing in both Volkswagen and Ecclesiastical Insurance 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 Volkswagen and Ecclesiastical Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG and Ecclesiastical Insurance Office, you can compare the effects of market volatilities on Volkswagen and Ecclesiastical Insurance 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 Volkswagen with a short position of Ecclesiastical Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Ecclesiastical Insurance.
Diversification Opportunities for Volkswagen and Ecclesiastical Insurance
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Volkswagen and Ecclesiastical is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG and Ecclesiastical Insurance Offic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecclesiastical Insurance and Volkswagen 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 Volkswagen AG are associated (or correlated) with Ecclesiastical Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecclesiastical Insurance has no effect on the direction of Volkswagen i.e., Volkswagen and Ecclesiastical Insurance go up and down completely randomly.
Pair Corralation between Volkswagen and Ecclesiastical Insurance
Assuming the 90 days trading horizon Volkswagen AG is expected to generate 1.17 times more return on investment than Ecclesiastical Insurance. However, Volkswagen is 1.17 times more volatile than Ecclesiastical Insurance Office. It trades about 0.0 of its potential returns per unit of risk. Ecclesiastical Insurance Office is currently generating about -0.03 per unit of risk. If you would invest 8,829 in Volkswagen AG on September 12, 2024 and sell it today you would lose (9.00) from holding Volkswagen AG or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volkswagen AG vs. Ecclesiastical Insurance Offic
Performance |
| Timeline |
| Volkswagen AG |
| Ecclesiastical Insurance |
Volkswagen and Ecclesiastical Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Ecclesiastical Insurance
The main advantage of trading using opposite Volkswagen and Ecclesiastical Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, Ecclesiastical Insurance 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 Ecclesiastical Insurance will offset losses from the drop in Ecclesiastical Insurance's long position.| Volkswagen vs. Universal Health Services | Volkswagen vs. Induction Healthcare Group | Volkswagen vs. Omega Healthcare Investors | Volkswagen vs. Eco Animal Health |
| Ecclesiastical Insurance vs. Samsung Electronics Co | Ecclesiastical Insurance vs. Samsung Electronics Co | Ecclesiastical Insurance vs. Hyundai Motor | Ecclesiastical Insurance 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |