Correlation Between Adidas AG and MICRONIC MYDATA
Can any of the company-specific risk be diversified away by investing in both Adidas AG and MICRONIC MYDATA 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 Adidas AG and MICRONIC MYDATA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between adidas AG and MICRONIC MYDATA, you can compare the effects of market volatilities on Adidas AG and MICRONIC MYDATA 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 Adidas AG with a short position of MICRONIC MYDATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adidas AG and MICRONIC MYDATA.
Diversification Opportunities for Adidas AG and MICRONIC MYDATA
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Adidas and MICRONIC is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding adidas AG and MICRONIC MYDATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICRONIC MYDATA and Adidas AG 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 adidas AG are associated (or correlated) with MICRONIC MYDATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICRONIC MYDATA has no effect on the direction of Adidas AG i.e., Adidas AG and MICRONIC MYDATA go up and down completely randomly.
Pair Corralation between Adidas AG and MICRONIC MYDATA
Assuming the 90 days trading horizon Adidas AG is expected to generate 1.56 times less return on investment than MICRONIC MYDATA. But when comparing it to its historical volatility, adidas AG is 1.2 times less risky than MICRONIC MYDATA. It trades about 0.15 of its potential returns per unit of risk. MICRONIC MYDATA is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,386 in MICRONIC MYDATA on November 3, 2024 and sell it today you would earn a total of 530.00 from holding MICRONIC MYDATA or generate 15.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
adidas AG vs. MICRONIC MYDATA
Performance |
| Timeline |
| adidas AG |
| MICRONIC MYDATA |
Adidas AG and MICRONIC MYDATA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adidas AG and MICRONIC MYDATA
The main advantage of trading using opposite Adidas AG and MICRONIC MYDATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adidas AG position performs unexpectedly, MICRONIC MYDATA 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 MICRONIC MYDATA will offset losses from the drop in MICRONIC MYDATA's long position.| Adidas AG vs. Kering SA | Adidas AG vs. Superior Plus Corp | Adidas AG vs. Origin Agritech | Adidas AG vs. Identiv |
| MICRONIC MYDATA vs. Air Transport Services | MICRONIC MYDATA vs. PARKEN Sport Entertainment | MICRONIC MYDATA vs. Tower One Wireless | MICRONIC MYDATA vs. Marie Brizard Wine |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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