Correlation Between SCANDION ONC and Bayer Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both SCANDION ONC and Bayer Aktiengesellscha 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 SCANDION ONC and Bayer Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCANDION ONC DK 0735 and Bayer Aktiengesellschaft, you can compare the effects of market volatilities on SCANDION ONC and Bayer Aktiengesellscha 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 SCANDION ONC with a short position of Bayer Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANDION ONC and Bayer Aktiengesellscha.
Diversification Opportunities for SCANDION ONC and Bayer Aktiengesellscha
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SCANDION and Bayer is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding SCANDION ONC DK 0735 and Bayer Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer Aktiengesellschaft and SCANDION ONC 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 SCANDION ONC DK 0735 are associated (or correlated) with Bayer Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer Aktiengesellschaft has no effect on the direction of SCANDION ONC i.e., SCANDION ONC and Bayer Aktiengesellscha go up and down completely randomly.
Pair Corralation between SCANDION ONC and Bayer Aktiengesellscha
Assuming the 90 days horizon SCANDION ONC DK 0735 is expected to generate 4.64 times more return on investment than Bayer Aktiengesellscha. However, SCANDION ONC is 4.64 times more volatile than Bayer Aktiengesellschaft. It trades about 0.01 of its potential returns per unit of risk. Bayer Aktiengesellschaft is currently generating about -0.02 per unit of risk. If you would invest 12.00 in SCANDION ONC DK 0735 on August 25, 2024 and sell it today you would lose (11.42) from holding SCANDION ONC DK 0735 or give up 95.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCANDION ONC DK 0735 vs. Bayer Aktiengesellschaft
Performance |
| Timeline |
| SCANDION ONC DK |
| Bayer Aktiengesellschaft |
SCANDION ONC and Bayer Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCANDION ONC and Bayer Aktiengesellscha
The main advantage of trading using opposite SCANDION ONC and Bayer Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANDION ONC position performs unexpectedly, Bayer Aktiengesellscha 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 Aktiengesellscha will offset losses from the drop in Bayer Aktiengesellscha's long position.| SCANDION ONC vs. CN MODERN DAIRY | SCANDION ONC vs. AUSNUTRIA DAIRY | SCANDION ONC vs. SENECA FOODS A | SCANDION ONC vs. TreeHouse Foods |
| Bayer Aktiengesellscha vs. Johnson Johnson | Bayer Aktiengesellscha vs. Merck Co | Bayer Aktiengesellscha vs. Roche Holding Ltd | Bayer Aktiengesellscha vs. Amgen Inc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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