Correlation Between Aston Martin and Mercedes Benz
Can any of the company-specific risk be diversified away by investing in both Aston Martin 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 Aston Martin and Mercedes Benz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aston Martin Lagonda and Mercedes Benz Group AG, you can compare the effects of market volatilities on Aston Martin 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 Aston Martin with a short position of Mercedes Benz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston Martin and Mercedes Benz.
Diversification Opportunities for Aston Martin and Mercedes Benz
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aston and Mercedes is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aston Martin Lagonda 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 Aston Martin 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 Aston Martin Lagonda 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 Aston Martin i.e., Aston Martin and Mercedes Benz go up and down completely randomly.
Pair Corralation between Aston Martin and Mercedes Benz
Assuming the 90 days horizon Aston Martin Lagonda is expected to under-perform the Mercedes Benz. In addition to that, Aston Martin is 2.25 times more volatile than Mercedes Benz Group AG. It trades about -0.01 of its total potential returns per unit of risk. Mercedes Benz Group AG is currently generating about -0.01 per unit of volatility. If you would invest 1,775 in Mercedes Benz Group AG on November 2, 2024 and sell it today you would lose (238.00) from holding Mercedes Benz Group AG or give up 13.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aston Martin Lagonda vs. Mercedes Benz Group AG
Performance |
| Timeline |
| Aston Martin Lagonda |
| Mercedes Benz Group |
Aston Martin and Mercedes Benz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aston Martin and Mercedes Benz
The main advantage of trading using opposite Aston Martin and Mercedes Benz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston Martin 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.| Aston Martin vs. Geely Automobile Holdings | Aston Martin vs. Guangzhou Automobile Group | Aston Martin vs. Dowlais Group plc | Aston Martin vs. NFI Group |
| Mercedes Benz vs. Porsche Automobile Holding | Mercedes Benz vs. Volkswagen AG 110 | Mercedes Benz vs. Mercedes Benz Group AG | Mercedes Benz vs. Volkswagen AG Pref |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |