Correlation Between TAIGA BUILDING and HORNBACH Baumarkt
Can any of the company-specific risk be diversified away by investing in both TAIGA BUILDING 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 TAIGA BUILDING and HORNBACH Baumarkt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAIGA BUILDING PRODS and HORNBACH Baumarkt AG, you can compare the effects of market volatilities on TAIGA BUILDING 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 TAIGA BUILDING with a short position of HORNBACH Baumarkt. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAIGA BUILDING and HORNBACH Baumarkt.
Diversification Opportunities for TAIGA BUILDING and HORNBACH Baumarkt
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TAIGA and HORNBACH is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding TAIGA BUILDING PRODS and HORNBACH Baumarkt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HORNBACH Baumarkt and TAIGA BUILDING 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 TAIGA BUILDING PRODS 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 TAIGA BUILDING i.e., TAIGA BUILDING and HORNBACH Baumarkt go up and down completely randomly.
Pair Corralation between TAIGA BUILDING and HORNBACH Baumarkt
Assuming the 90 days horizon TAIGA BUILDING is expected to generate 4.26 times less return on investment than HORNBACH Baumarkt. In addition to that, TAIGA BUILDING is 1.12 times more volatile than HORNBACH Baumarkt AG. It trades about 0.02 of its total potential returns per unit of risk. HORNBACH Baumarkt AG is currently generating about 0.11 per unit of volatility. If you would invest 5,100 in HORNBACH Baumarkt AG on December 4, 2024 and sell it today you would earn a total of 1,250 from holding HORNBACH Baumarkt AG or generate 24.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TAIGA BUILDING PRODS vs. HORNBACH Baumarkt AG
Performance |
| Timeline |
| TAIGA BUILDING PRODS |
| HORNBACH Baumarkt |
TAIGA BUILDING and HORNBACH Baumarkt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAIGA BUILDING and HORNBACH Baumarkt
The main advantage of trading using opposite TAIGA BUILDING and HORNBACH Baumarkt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAIGA BUILDING 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.| TAIGA BUILDING vs. The Home Depot | TAIGA BUILDING vs. The Home Depot | TAIGA BUILDING vs. Floor Decor Holdings | TAIGA BUILDING vs. LESLIES INC DL |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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