Correlation Between COFACE SA and MUENCHRUECKUNSADR
Can any of the company-specific risk be diversified away by investing in both COFACE SA and MUENCHRUECKUNSADR 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 COFACE SA and MUENCHRUECKUNSADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFACE SA and MUENCHRUECKUNSADR 110, you can compare the effects of market volatilities on COFACE SA and MUENCHRUECKUNSADR 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 COFACE SA with a short position of MUENCHRUECKUNSADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFACE SA and MUENCHRUECKUNSADR.
Diversification Opportunities for COFACE SA and MUENCHRUECKUNSADR
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COFACE and MUENCHRUECKUNSADR is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding COFACE SA and MUENCHRUECKUNSADR 110 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MUENCHRUECKUNSADR 110 and COFACE SA 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 COFACE SA are associated (or correlated) with MUENCHRUECKUNSADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MUENCHRUECKUNSADR 110 has no effect on the direction of COFACE SA i.e., COFACE SA and MUENCHRUECKUNSADR go up and down completely randomly.
Pair Corralation between COFACE SA and MUENCHRUECKUNSADR
Assuming the 90 days horizon COFACE SA is expected to under-perform the MUENCHRUECKUNSADR. But the stock apears to be less risky and, when comparing its historical volatility, COFACE SA is 1.86 times less risky than MUENCHRUECKUNSADR. The stock trades about -0.16 of its potential returns per unit of risk. The MUENCHRUECKUNSADR 110 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 975.00 in MUENCHRUECKUNSADR 110 on September 23, 2024 and sell it today you would earn a total of 5.00 from holding MUENCHRUECKUNSADR 110 or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFACE SA vs. MUENCHRUECKUNSADR 110
Performance |
| Timeline |
| COFACE SA |
| MUENCHRUECKUNSADR 110 |
COFACE SA and MUENCHRUECKUNSADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFACE SA and MUENCHRUECKUNSADR
The main advantage of trading using opposite COFACE SA and MUENCHRUECKUNSADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFACE SA position performs unexpectedly, MUENCHRUECKUNSADR 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 MUENCHRUECKUNSADR will offset losses from the drop in MUENCHRUECKUNSADR's long position.| COFACE SA vs. MUENCHRUECKUNSADR 110 | COFACE SA vs. Swiss Re AG | COFACE SA vs. HANNRUECKVSE ADR 12ON | COFACE SA vs. Everest Group |
| MUENCHRUECKUNSADR vs. Swiss Re AG | MUENCHRUECKUNSADR vs. HANNRUECKVSE ADR 12ON | MUENCHRUECKUNSADR vs. Everest Group | MUENCHRUECKUNSADR vs. Reinsurance Group of |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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