Correlation Between MR BRICOLAGE and HORNBACH Baumarkt
Can any of the company-specific risk be diversified away by investing in both MR BRICOLAGE and HORNBACH Baumarkt 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 MR BRICOLAGE and HORNBACH Baumarkt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MR BRICOLAGE INH and HORNBACH Baumarkt AG, you can compare the effects of market volatilities on MR BRICOLAGE and HORNBACH Baumarkt 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 MR BRICOLAGE with a short position of HORNBACH Baumarkt. Check out your portfolio center. Please also check ongoing floating volatility patterns of MR BRICOLAGE and HORNBACH Baumarkt.
Diversification Opportunities for MR BRICOLAGE and HORNBACH Baumarkt
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 4OL and HORNBACH is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding MR BRICOLAGE INH and HORNBACH Baumarkt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HORNBACH Baumarkt and MR BRICOLAGE 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 MR BRICOLAGE INH are associated (or correlated) with HORNBACH Baumarkt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HORNBACH Baumarkt has no effect on the direction of MR BRICOLAGE i.e., MR BRICOLAGE and HORNBACH Baumarkt go up and down completely randomly.
Pair Corralation between MR BRICOLAGE and HORNBACH Baumarkt
Assuming the 90 days horizon MR BRICOLAGE INH is expected to under-perform the HORNBACH Baumarkt. In addition to that, MR BRICOLAGE is 1.46 times more volatile than HORNBACH Baumarkt AG. It trades about -0.01 of its total potential returns per unit of risk. HORNBACH Baumarkt AG is currently generating about 0.19 per unit of volatility. If you would invest 6,050 in HORNBACH Baumarkt AG on October 21, 2024 and sell it today you would earn a total of 250.00 from holding HORNBACH Baumarkt AG or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MR BRICOLAGE INH vs. HORNBACH Baumarkt AG
Performance |
| Timeline |
| MR BRICOLAGE INH |
| HORNBACH Baumarkt |
MR BRICOLAGE and HORNBACH Baumarkt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MR BRICOLAGE and HORNBACH Baumarkt
The main advantage of trading using opposite MR BRICOLAGE and HORNBACH Baumarkt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MR BRICOLAGE position performs unexpectedly, HORNBACH Baumarkt 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 HORNBACH Baumarkt will offset losses from the drop in HORNBACH Baumarkt's long position.| MR BRICOLAGE vs. The Home Depot | MR BRICOLAGE vs. The Home Depot | MR BRICOLAGE vs. Floor Decor Holdings | MR BRICOLAGE vs. LESLIES INC DL |
| HORNBACH Baumarkt vs. The Home Depot | HORNBACH Baumarkt vs. The Home Depot | HORNBACH Baumarkt vs. Floor Decor Holdings | HORNBACH Baumarkt vs. LESLIES INC DL |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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