Correlation Between ALBIS LEASING and Mercedes-Benz Group
Can any of the company-specific risk be diversified away by investing in both ALBIS LEASING and Mercedes-Benz Group 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 ALBIS LEASING and Mercedes-Benz Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALBIS LEASING AG and Mercedes Benz Group AG, you can compare the effects of market volatilities on ALBIS LEASING and Mercedes-Benz Group 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 ALBIS LEASING with a short position of Mercedes-Benz Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALBIS LEASING and Mercedes-Benz Group.
Diversification Opportunities for ALBIS LEASING and Mercedes-Benz Group
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ALBIS and Mercedes-Benz is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding ALBIS LEASING AG 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 ALBIS LEASING 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 ALBIS LEASING AG are associated (or correlated) with Mercedes-Benz Group. 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 ALBIS LEASING i.e., ALBIS LEASING and Mercedes-Benz Group go up and down completely randomly.
Pair Corralation between ALBIS LEASING and Mercedes-Benz Group
Assuming the 90 days trading horizon ALBIS LEASING AG is expected to generate 0.75 times more return on investment than Mercedes-Benz Group. However, ALBIS LEASING AG is 1.34 times less risky than Mercedes-Benz Group. It trades about 0.19 of its potential returns per unit of risk. Mercedes Benz Group AG is currently generating about -0.12 per unit of risk. If you would invest 217.00 in ALBIS LEASING AG on September 1, 2024 and sell it today you would earn a total of 61.00 from holding ALBIS LEASING AG or generate 28.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALBIS LEASING AG vs. Mercedes Benz Group AG
Performance |
| Timeline |
| ALBIS LEASING AG |
| Mercedes Benz Group |
ALBIS LEASING and Mercedes-Benz Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALBIS LEASING and Mercedes-Benz Group
The main advantage of trading using opposite ALBIS LEASING and Mercedes-Benz Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALBIS LEASING position performs unexpectedly, Mercedes-Benz Group 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 Group will offset losses from the drop in Mercedes-Benz Group's long position.| ALBIS LEASING vs. BJs Restaurants | ALBIS LEASING vs. THAI BEVERAGE | ALBIS LEASING vs. BOSTON BEER A | ALBIS LEASING vs. Khiron Life Sciences |
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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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