Correlation Between ABB PAR and Brockhaus Capital
Can any of the company-specific risk be diversified away by investing in both ABB PAR and Brockhaus Capital 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 ABB PAR and Brockhaus Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABB PAR AB and Brockhaus Capital Management, you can compare the effects of market volatilities on ABB PAR and Brockhaus Capital 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 ABB PAR with a short position of Brockhaus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABB PAR and Brockhaus Capital.
Diversification Opportunities for ABB PAR and Brockhaus Capital
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ABB and Brockhaus is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding ABB PAR AB and Brockhaus Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brockhaus Capital and ABB PAR 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 ABB PAR AB are associated (or correlated) with Brockhaus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brockhaus Capital has no effect on the direction of ABB PAR i.e., ABB PAR and Brockhaus Capital go up and down completely randomly.
Pair Corralation between ABB PAR and Brockhaus Capital
Assuming the 90 days horizon ABB PAR is expected to generate 1.1 times less return on investment than Brockhaus Capital. But when comparing it to its historical volatility, ABB PAR AB is 1.33 times less risky than Brockhaus Capital. It trades about 0.03 of its potential returns per unit of risk. Brockhaus Capital Management is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,951 in Brockhaus Capital Management on October 18, 2024 and sell it today you would earn a total of 389.00 from holding Brockhaus Capital Management or generate 19.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
ABB PAR AB vs. Brockhaus Capital Management
Performance |
| Timeline |
| ABB PAR AB |
| Brockhaus Capital |
ABB PAR and Brockhaus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABB PAR and Brockhaus Capital
The main advantage of trading using opposite ABB PAR and Brockhaus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABB PAR position performs unexpectedly, Brockhaus Capital 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 Brockhaus Capital will offset losses from the drop in Brockhaus Capital's long position.| ABB PAR vs. Nanjing Panda Electronics | ABB PAR vs. Richardson Electronics | ABB PAR vs. ELECTRONIC ARTS | ABB PAR vs. Benchmark Electronics |
| Brockhaus Capital vs. CDN IMPERIAL BANK | Brockhaus Capital vs. Darden Restaurants | Brockhaus Capital vs. Cincinnati Financial Corp | Brockhaus Capital vs. Virtu Financial |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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