Correlation Between BASF SE and AKKO Invest
Can any of the company-specific risk be diversified away by investing in both BASF SE and AKKO Invest 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 AKKO Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BASF SE and AKKO Invest Nyrt, you can compare the effects of market volatilities on BASF SE and AKKO Invest 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 AKKO Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of BASF SE and AKKO Invest.
Diversification Opportunities for BASF SE and AKKO Invest
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BASF and AKKO is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding BASF SE and AKKO Invest Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKKO Invest Nyrt 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 AKKO Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKKO Invest Nyrt has no effect on the direction of BASF SE i.e., BASF SE and AKKO Invest go up and down completely randomly.
Pair Corralation between BASF SE and AKKO Invest
Assuming the 90 days trading horizon BASF SE is expected to generate 0.86 times more return on investment than AKKO Invest. However, BASF SE is 1.17 times less risky than AKKO Invest. It trades about 0.56 of its potential returns per unit of risk. AKKO Invest Nyrt is currently generating about -0.06 per unit of risk. If you would invest 1,718,000 in BASF SE on September 18, 2024 and sell it today you would earn a total of 146,400 from holding BASF SE or generate 8.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 36.36% |
| Values | Daily Returns |
BASF SE vs. AKKO Invest Nyrt
Performance |
| Timeline |
| BASF SE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| AKKO Invest Nyrt |
BASF SE and AKKO Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BASF SE and AKKO Invest
The main advantage of trading using opposite BASF SE and AKKO Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BASF SE position performs unexpectedly, AKKO Invest 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 AKKO Invest will offset losses from the drop in AKKO Invest's long position.| BASF SE vs. OTP Bank Nyrt | BASF SE vs. MOL Nyrt | BASF SE vs. OPUS GLOBAL Nyrt | BASF SE vs. ALTEO Energiaszolgaltato Nyrt |
| AKKO Invest vs. OPUS GLOBAL Nyrt | AKKO Invest vs. OTP Bank Nyrt | AKKO Invest vs. Infineon Technologies AG | AKKO Invest vs. Appeninn Nyrt |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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