Correlation Between BASF SE and BASF SE
Can any of the company-specific risk be diversified away by investing in both BASF SE and BASF SE 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 BASF SE and BASF SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BASF SE and BASF SE, you can compare the effects of market volatilities on BASF SE and BASF SE 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 BASF SE with a short position of BASF SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BASF SE and BASF SE.
Diversification Opportunities for BASF SE and BASF SE
Very poor diversification
The 3 months correlation between BASF and BASF is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding BASF SE and BASF SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASF SE and BASF SE 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 BASF SE are associated (or correlated) with BASF SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASF SE has no effect on the direction of BASF SE i.e., BASF SE and BASF SE go up and down completely randomly.
Pair Corralation between BASF SE and BASF SE
Assuming the 90 days horizon BASF SE is expected to under-perform the BASF SE. But the stock apears to be less risky and, when comparing its historical volatility, BASF SE is 1.04 times less risky than BASF SE. The stock trades about -0.21 of its potential returns per unit of risk. The BASF SE is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 4,604 in BASF SE on August 25, 2024 and sell it today you would lose (346.00) from holding BASF SE or give up 7.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
BASF SE vs. BASF SE
Performance |
| Timeline |
| BASF SE |
| BASF SE |
BASF SE and BASF SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BASF SE and BASF SE
The main advantage of trading using opposite BASF SE and BASF SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BASF SE position performs unexpectedly, BASF SE 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 BASF SE will offset losses from the drop in BASF SE's long position.| BASF SE vs. Allianz SE | BASF SE vs. Siemens Aktiengesellschaft | BASF SE vs. Bayer AG NA | BASF SE vs. SAP SE |
| BASF SE vs. North American Construction | BASF SE vs. WIMFARM SA EO | BASF SE vs. TITAN MACHINERY | BASF SE vs. Ming Le Sports |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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