Correlation Between WIMFARM SA and COMMERCIAL VEHICLE
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA and COMMERCIAL VEHICLE 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 WIMFARM SA and COMMERCIAL VEHICLE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIMFARM SA EO and COMMERCIAL VEHICLE, you can compare the effects of market volatilities on WIMFARM SA and COMMERCIAL VEHICLE 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 WIMFARM SA with a short position of COMMERCIAL VEHICLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and COMMERCIAL VEHICLE.
Diversification Opportunities for WIMFARM SA and COMMERCIAL VEHICLE
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WIMFARM and COMMERCIAL is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO and COMMERCIAL VEHICLE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMMERCIAL VEHICLE and WIMFARM 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 WIMFARM SA EO are associated (or correlated) with COMMERCIAL VEHICLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMMERCIAL VEHICLE has no effect on the direction of WIMFARM SA i.e., WIMFARM SA and COMMERCIAL VEHICLE go up and down completely randomly.
Pair Corralation between WIMFARM SA and COMMERCIAL VEHICLE
Assuming the 90 days horizon WIMFARM SA EO is expected to generate 0.23 times more return on investment than COMMERCIAL VEHICLE. However, WIMFARM SA EO is 4.38 times less risky than COMMERCIAL VEHICLE. It trades about -0.21 of its potential returns per unit of risk. COMMERCIAL VEHICLE is currently generating about -0.08 per unit of risk. If you would invest 348.00 in WIMFARM SA EO on September 1, 2024 and sell it today you would lose (25.00) from holding WIMFARM SA EO or give up 7.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIMFARM SA EO vs. COMMERCIAL VEHICLE
Performance |
| Timeline |
| WIMFARM SA EO |
| COMMERCIAL VEHICLE |
WIMFARM SA and COMMERCIAL VEHICLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIMFARM SA and COMMERCIAL VEHICLE
The main advantage of trading using opposite WIMFARM SA and COMMERCIAL VEHICLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA position performs unexpectedly, COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE will offset losses from the drop in COMMERCIAL VEHICLE's long position.| WIMFARM SA vs. UPDATE SOFTWARE | WIMFARM SA vs. XLMedia PLC | WIMFARM SA vs. GigaMedia | WIMFARM SA vs. FUYO GENERAL LEASE |
| COMMERCIAL VEHICLE vs. SIVERS SEMICONDUCTORS AB | COMMERCIAL VEHICLE vs. Darden Restaurants | COMMERCIAL VEHICLE vs. Reliance Steel Aluminum | COMMERCIAL VEHICLE vs. Q2M Managementberatung AG |
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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