Correlation Between ADRIATIC METALS and Bayer AG
Can any of the company-specific risk be diversified away by investing in both ADRIATIC METALS and Bayer 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 ADRIATIC METALS and Bayer AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADRIATIC METALS LS 013355 and Bayer AG NA, you can compare the effects of market volatilities on ADRIATIC METALS and Bayer 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 ADRIATIC METALS with a short position of Bayer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADRIATIC METALS and Bayer AG.
Diversification Opportunities for ADRIATIC METALS and Bayer AG
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ADRIATIC and Bayer is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding ADRIATIC METALS LS 013355 and Bayer AG NA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer AG NA and ADRIATIC METALS 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 ADRIATIC METALS LS 013355 are associated (or correlated) with Bayer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer AG NA has no effect on the direction of ADRIATIC METALS i.e., ADRIATIC METALS and Bayer AG go up and down completely randomly.
Pair Corralation between ADRIATIC METALS and Bayer AG
Assuming the 90 days trading horizon ADRIATIC METALS LS 013355 is expected to generate 1.72 times more return on investment than Bayer AG. However, ADRIATIC METALS is 1.72 times more volatile than Bayer AG NA. It trades about 0.15 of its potential returns per unit of risk. Bayer AG NA is currently generating about -0.19 per unit of risk. If you would invest 165.00 in ADRIATIC METALS LS 013355 on August 29, 2024 and sell it today you would earn a total of 75.00 from holding ADRIATIC METALS LS 013355 or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
ADRIATIC METALS LS 013355 vs. Bayer AG NA
Performance |
| Timeline |
| ADRIATIC METALS LS |
| Bayer AG NA |
ADRIATIC METALS and Bayer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADRIATIC METALS and Bayer AG
The main advantage of trading using opposite ADRIATIC METALS and Bayer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADRIATIC METALS position performs unexpectedly, Bayer 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 Bayer AG will offset losses from the drop in Bayer AG's long position.| ADRIATIC METALS vs. AEGEAN AIRLINES | ADRIATIC METALS vs. Costco Wholesale Corp | ADRIATIC METALS vs. Ross Stores | ADRIATIC METALS vs. Retail Estates NV |
| Bayer AG vs. CENTURIA OFFICE REIT | Bayer AG vs. Neinor Homes SA | Bayer AG vs. COMMERCIAL VEHICLE | Bayer AG vs. Commercial Vehicle Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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