Correlation Between Neinor Homes and WAGNERS HOLDING
Can any of the company-specific risk be diversified away by investing in both Neinor Homes and WAGNERS HOLDING 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 Neinor Homes and WAGNERS HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neinor Homes SA and WAGNERS HOLDING LTD, you can compare the effects of market volatilities on Neinor Homes and WAGNERS HOLDING 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 Neinor Homes with a short position of WAGNERS HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neinor Homes and WAGNERS HOLDING.
Diversification Opportunities for Neinor Homes and WAGNERS HOLDING
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Neinor and WAGNERS is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Neinor Homes SA and WAGNERS HOLDING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WAGNERS HOLDING LTD and Neinor Homes 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 Neinor Homes SA are associated (or correlated) with WAGNERS HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WAGNERS HOLDING LTD has no effect on the direction of Neinor Homes i.e., Neinor Homes and WAGNERS HOLDING go up and down completely randomly.
Pair Corralation between Neinor Homes and WAGNERS HOLDING
Assuming the 90 days trading horizon Neinor Homes is expected to generate 2.69 times less return on investment than WAGNERS HOLDING. But when comparing it to its historical volatility, Neinor Homes SA is 1.31 times less risky than WAGNERS HOLDING. It trades about 0.14 of its potential returns per unit of risk. WAGNERS HOLDING LTD is currently generating about 0.28 of returns per unit of risk over similar time horizon. 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 |
Neinor Homes SA vs. WAGNERS HOLDING LTD
Performance |
| Timeline |
| Neinor Homes SA |
| WAGNERS HOLDING LTD |
Neinor Homes and WAGNERS HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neinor Homes and WAGNERS HOLDING
The main advantage of trading using opposite Neinor Homes and WAGNERS HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neinor Homes position performs unexpectedly, WAGNERS HOLDING 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 WAGNERS HOLDING will offset losses from the drop in WAGNERS HOLDING's long position.| Neinor Homes vs. AEGEAN AIRLINES | Neinor Homes vs. SOUTHWEST AIRLINES | Neinor Homes vs. Fukuyama Transporting Co | Neinor Homes vs. Television Broadcasts Limited |
| WAGNERS HOLDING vs. US Physical Therapy | WAGNERS HOLDING vs. Garofalo Health Care | WAGNERS HOLDING vs. Siemens Healthineers AG | WAGNERS HOLDING vs. Richardson Electronics |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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