Correlation Between SANOK RUBBER and KOWORLD AG
Can any of the company-specific risk be diversified away by investing in both SANOK RUBBER and KOWORLD AG 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 SANOK RUBBER and KOWORLD AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANOK RUBBER ZY and KOWORLD AG, you can compare the effects of market volatilities on SANOK RUBBER and KOWORLD AG 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 SANOK RUBBER with a short position of KOWORLD AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANOK RUBBER and KOWORLD AG.
Diversification Opportunities for SANOK RUBBER and KOWORLD AG
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SANOK and KOWORLD is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SANOK RUBBER ZY and KOWORLD AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOWORLD AG and SANOK RUBBER 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 SANOK RUBBER ZY are associated (or correlated) with KOWORLD AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOWORLD AG has no effect on the direction of SANOK RUBBER i.e., SANOK RUBBER and KOWORLD AG go up and down completely randomly.
Pair Corralation between SANOK RUBBER and KOWORLD AG
Assuming the 90 days horizon SANOK RUBBER ZY is expected to generate 1.08 times more return on investment than KOWORLD AG. However, SANOK RUBBER is 1.08 times more volatile than KOWORLD AG. It trades about 0.09 of its potential returns per unit of risk. KOWORLD AG is currently generating about 0.01 per unit of risk. If you would invest 157.00 in SANOK RUBBER ZY on September 14, 2024 and sell it today you would earn a total of 291.00 from holding SANOK RUBBER ZY or generate 185.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
SANOK RUBBER ZY vs. KOWORLD AG
Performance |
| Timeline |
| SANOK RUBBER ZY |
| KOWORLD AG |
SANOK RUBBER and KOWORLD AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANOK RUBBER and KOWORLD AG
The main advantage of trading using opposite SANOK RUBBER and KOWORLD AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANOK RUBBER position performs unexpectedly, KOWORLD AG 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 KOWORLD AG will offset losses from the drop in KOWORLD AG's long position.| SANOK RUBBER vs. Bridgestone | SANOK RUBBER vs. Superior Plus Corp | SANOK RUBBER vs. SIVERS SEMICONDUCTORS AB | SANOK RUBBER vs. Norsk Hydro ASA |
| KOWORLD AG vs. Summit Materials | KOWORLD AG vs. Rayonier Advanced Materials | KOWORLD AG vs. ITALIAN WINE BRANDS | KOWORLD AG vs. SANOK RUBBER ZY |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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