Correlation Between BASF SE and Nutex Investments
Can any of the company-specific risk be diversified away by investing in both BASF SE and Nutex Investments 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 Nutex Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BASF SE and Nutex Investments PLC, you can compare the effects of market volatilities on BASF SE and Nutex Investments 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 Nutex Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of BASF SE and Nutex Investments.
Diversification Opportunities for BASF SE and Nutex Investments
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between BASF and Nutex is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding BASF SE and Nutex Investments PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutex Investments PLC 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 Nutex Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutex Investments PLC has no effect on the direction of BASF SE i.e., BASF SE and Nutex Investments go up and down completely randomly.
Pair Corralation between BASF SE and Nutex Investments
Assuming the 90 days trading horizon BASF SE is expected to generate 1.54 times less return on investment than Nutex Investments. But when comparing it to its historical volatility, BASF SE is 4.45 times less risky than Nutex Investments. It trades about 0.56 of its potential returns per unit of risk. Nutex Investments PLC is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,855 in Nutex Investments PLC on September 18, 2024 and sell it today you would earn a total of 625.00 from holding Nutex Investments PLC or generate 33.69% 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. Nutex Investments PLC
Performance |
| Timeline |
| BASF SE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Nutex Investments PLC |
BASF SE and Nutex Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BASF SE and Nutex Investments
The main advantage of trading using opposite BASF SE and Nutex Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BASF SE position performs unexpectedly, Nutex Investments 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 Nutex Investments will offset losses from the drop in Nutex Investments' 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 |
| Nutex Investments vs. NordTelekom Telecommunications Service | Nutex Investments vs. Infineon Technologies AG | Nutex Investments vs. AKKO Invest Nyrt | Nutex Investments vs. Raba Jarmuipari Holding |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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