Correlation Between 2G ENERGY and Vonovia SE
Can any of the company-specific risk be diversified away by investing in both 2G ENERGY and Vonovia SE 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 2G ENERGY and Vonovia SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 2G ENERGY and Vonovia SE, you can compare the effects of market volatilities on 2G ENERGY and Vonovia SE 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 2G ENERGY with a short position of Vonovia SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2G ENERGY and Vonovia SE.
Diversification Opportunities for 2G ENERGY and Vonovia SE
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 2GB and Vonovia is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding 2G ENERGY and Vonovia SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vonovia SE and 2G ENERGY 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 2G ENERGY are associated (or correlated) with Vonovia SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vonovia SE has no effect on the direction of 2G ENERGY i.e., 2G ENERGY and Vonovia SE go up and down completely randomly.
Pair Corralation between 2G ENERGY and Vonovia SE
Assuming the 90 days trading horizon 2G ENERGY is expected to under-perform the Vonovia SE. In addition to that, 2G ENERGY is 1.38 times more volatile than Vonovia SE. It trades about -0.04 of its total potential returns per unit of risk. Vonovia SE is currently generating about 0.03 per unit of volatility. If you would invest 2,890 in Vonovia SE on August 30, 2024 and sell it today you would earn a total of 139.00 from holding Vonovia SE or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
2G ENERGY vs. Vonovia SE
Performance |
| Timeline |
| 2G ENERGY |
| Vonovia SE |
2G ENERGY and Vonovia SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 2G ENERGY and Vonovia SE
The main advantage of trading using opposite 2G ENERGY and Vonovia SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2G ENERGY position performs unexpectedly, Vonovia SE 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 Vonovia SE will offset losses from the drop in Vonovia SE's long position.| 2G ENERGY vs. Apple Inc | 2G ENERGY vs. Apple Inc | 2G ENERGY vs. Superior Plus Corp | 2G ENERGY vs. SIVERS SEMICONDUCTORS AB |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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