Correlation Between METALL ZUG and Pets At
Can any of the company-specific risk be diversified away by investing in both METALL ZUG and Pets At 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 METALL ZUG and Pets At into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between METALL ZUG AG and Pets at Home, you can compare the effects of market volatilities on METALL ZUG and Pets At 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 METALL ZUG with a short position of Pets At. Check out your portfolio center. Please also check ongoing floating volatility patterns of METALL ZUG and Pets At.
Diversification Opportunities for METALL ZUG and Pets At
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between METALL and Pets is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding METALL ZUG AG and Pets at Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pets at Home and METALL ZUG 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 METALL ZUG AG are associated (or correlated) with Pets At. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pets at Home has no effect on the direction of METALL ZUG i.e., METALL ZUG and Pets At go up and down completely randomly.
Pair Corralation between METALL ZUG and Pets At
Assuming the 90 days trading horizon METALL ZUG AG is expected to generate 0.31 times more return on investment than Pets At. However, METALL ZUG AG is 3.22 times less risky than Pets At. It trades about 0.08 of its potential returns per unit of risk. Pets at Home is currently generating about -0.32 per unit of risk. If you would invest 113,000 in METALL ZUG AG on September 24, 2024 and sell it today you would earn a total of 1,500 from holding METALL ZUG AG or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 71.43% |
| Values | Daily Returns |
METALL ZUG AG vs. Pets at Home
Performance |
| Timeline |
| METALL ZUG AG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Pets at Home |
METALL ZUG and Pets At Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with METALL ZUG and Pets At
The main advantage of trading using opposite METALL ZUG and Pets At positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METALL ZUG position performs unexpectedly, Pets At 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 Pets At will offset losses from the drop in Pets At's long position.| METALL ZUG vs. Uniper SE | METALL ZUG vs. Mulberry Group PLC | METALL ZUG vs. London Security Plc | METALL ZUG vs. Triad Group PLC |
| Pets At vs. AMG Advanced Metallurgical | Pets At vs. Monster Beverage Corp | Pets At vs. International Biotechnology Trust | Pets At vs. Panther Metals PLC |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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