Correlation Between Autoneum Holding and WisdomTree Europe
Can any of the company-specific risk be diversified away by investing in both Autoneum Holding and WisdomTree Europe 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 Autoneum Holding and WisdomTree Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autoneum Holding AG and WisdomTree Europe Equity, you can compare the effects of market volatilities on Autoneum Holding and WisdomTree Europe 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 Autoneum Holding with a short position of WisdomTree Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autoneum Holding and WisdomTree Europe.
Diversification Opportunities for Autoneum Holding and WisdomTree Europe
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Autoneum and WisdomTree is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Autoneum Holding AG and WisdomTree Europe Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Europe Equity and Autoneum Holding 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 Autoneum Holding AG are associated (or correlated) with WisdomTree Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Europe Equity has no effect on the direction of Autoneum Holding i.e., Autoneum Holding and WisdomTree Europe go up and down completely randomly.
Pair Corralation between Autoneum Holding and WisdomTree Europe
Assuming the 90 days trading horizon Autoneum Holding is expected to generate 1.42 times less return on investment than WisdomTree Europe. In addition to that, Autoneum Holding is 5.19 times more volatile than WisdomTree Europe Equity. It trades about 0.1 of its total potential returns per unit of risk. WisdomTree Europe Equity is currently generating about 0.74 per unit of volatility. If you would invest 1,912 in WisdomTree Europe Equity on November 28, 2024 and sell it today you would earn a total of 105.00 from holding WisdomTree Europe Equity or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autoneum Holding AG vs. WisdomTree Europe Equity
Performance |
| Timeline |
| Autoneum Holding |
| WisdomTree Europe Equity |
Autoneum Holding and WisdomTree Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autoneum Holding and WisdomTree Europe
The main advantage of trading using opposite Autoneum Holding and WisdomTree Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autoneum Holding position performs unexpectedly, WisdomTree Europe 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 WisdomTree Europe will offset losses from the drop in WisdomTree Europe's long position.| Autoneum Holding vs. Rieter Holding AG | Autoneum Holding vs. Comet Holding AG | Autoneum Holding vs. VAT Group AG | Autoneum Holding vs. Bossard Holding AG |
| WisdomTree Europe vs. WisdomTree Emerging Markets | WisdomTree Europe vs. WisdomTree Equity Income | WisdomTree Europe vs. WisdomTree Battery Solutions | WisdomTree Europe vs. WisdomTree Quality Dividend |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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