Correlation Between SCANDION ONC and Mercedes Benz
Can any of the company-specific risk be diversified away by investing in both SCANDION ONC and Mercedes Benz 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 Mercedes Benz 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 Mercedes Benz Group AG, you can compare the effects of market volatilities on SCANDION ONC and Mercedes Benz 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 Mercedes Benz. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANDION ONC and Mercedes Benz.
Diversification Opportunities for SCANDION ONC and Mercedes Benz
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SCANDION and Mercedes is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding SCANDION ONC DK 0735 and Mercedes Benz Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercedes Benz Group 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 Mercedes Benz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercedes Benz Group has no effect on the direction of SCANDION ONC i.e., SCANDION ONC and Mercedes Benz go up and down completely randomly.
Pair Corralation between SCANDION ONC and Mercedes Benz
Assuming the 90 days horizon SCANDION ONC DK 0735 is expected to generate 12.82 times more return on investment than Mercedes Benz. However, SCANDION ONC is 12.82 times more volatile than Mercedes Benz Group AG. It trades about 0.0 of its potential returns per unit of risk. Mercedes Benz Group AG is currently generating about -0.03 per unit of risk. If you would invest 14.00 in SCANDION ONC DK 0735 on August 29, 2024 and sell it today you would lose (13.42) from holding SCANDION ONC DK 0735 or give up 95.86% 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. Mercedes Benz Group AG
Performance |
| Timeline |
| SCANDION ONC DK |
| Mercedes Benz Group |
SCANDION ONC and Mercedes Benz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCANDION ONC and Mercedes Benz
The main advantage of trading using opposite SCANDION ONC and Mercedes Benz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANDION ONC position performs unexpectedly, Mercedes Benz 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 Mercedes Benz will offset losses from the drop in Mercedes Benz's long position.| SCANDION ONC vs. Mercedes Benz Group AG | SCANDION ONC vs. Superior Plus Corp | SCANDION ONC vs. NMI Holdings | SCANDION ONC vs. SIVERS SEMICONDUCTORS AB |
| Mercedes Benz vs. Global Ship Lease | Mercedes Benz vs. ALBIS LEASING AG | Mercedes Benz vs. Consolidated Communications Holdings | Mercedes Benz vs. GOODYEAR T RUBBER |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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