Correlation Between WAGNERS HOLDING and Neinor Homes
Can any of the company-specific risk be diversified away by investing in both WAGNERS HOLDING and Neinor Homes 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 WAGNERS HOLDING and Neinor Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WAGNERS HOLDING LTD and Neinor Homes SA, you can compare the effects of market volatilities on WAGNERS HOLDING and Neinor Homes 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 WAGNERS HOLDING with a short position of Neinor Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of WAGNERS HOLDING and Neinor Homes.
Diversification Opportunities for WAGNERS HOLDING and Neinor Homes
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WAGNERS and Neinor is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding WAGNERS HOLDING LTD and Neinor Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neinor Homes SA and WAGNERS HOLDING 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 WAGNERS HOLDING LTD are associated (or correlated) with Neinor Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neinor Homes SA has no effect on the direction of WAGNERS HOLDING i.e., WAGNERS HOLDING and Neinor Homes go up and down completely randomly.
Pair Corralation between WAGNERS HOLDING and Neinor Homes
Assuming the 90 days horizon WAGNERS HOLDING LTD is expected to generate 1.31 times more return on investment than Neinor Homes. However, WAGNERS HOLDING is 1.31 times more volatile than Neinor Homes SA. It trades about 0.28 of its potential returns per unit of risk. Neinor Homes SA is currently generating about 0.14 per unit of risk. If you would invest 82.00 in WAGNERS HOLDING LTD on November 7, 2024 and sell it today you would earn a total of 12.00 from holding WAGNERS HOLDING LTD or generate 14.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
WAGNERS HOLDING LTD vs. Neinor Homes SA
Performance |
| Timeline |
| WAGNERS HOLDING LTD |
| Neinor Homes SA |
WAGNERS HOLDING and Neinor Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WAGNERS HOLDING and Neinor Homes
The main advantage of trading using opposite WAGNERS HOLDING and Neinor Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WAGNERS HOLDING position performs unexpectedly, Neinor Homes 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 Neinor Homes will offset losses from the drop in Neinor Homes' long position.| WAGNERS HOLDING vs. US Physical Therapy | WAGNERS HOLDING vs. Garofalo Health Care | WAGNERS HOLDING vs. Siemens Healthineers AG | WAGNERS HOLDING vs. Richardson Electronics |
| Neinor Homes vs. AEGEAN AIRLINES | Neinor Homes vs. SOUTHWEST AIRLINES | Neinor Homes vs. Fukuyama Transporting Co | Neinor Homes vs. Television Broadcasts Limited |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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