Correlation Between BASF SE and Angstrom Technologies
Can any of the company-specific risk be diversified away by investing in both BASF SE and Angstrom Technologies 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 Angstrom Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BASF SE ADR and Angstrom Technologies, you can compare the effects of market volatilities on BASF SE and Angstrom Technologies 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 Angstrom Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of BASF SE and Angstrom Technologies.
Diversification Opportunities for BASF SE and Angstrom Technologies
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between BASF and Angstrom is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding BASF SE ADR and Angstrom Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angstrom Technologies 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 ADR are associated (or correlated) with Angstrom Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angstrom Technologies has no effect on the direction of BASF SE i.e., BASF SE and Angstrom Technologies go up and down completely randomly.
Pair Corralation between BASF SE and Angstrom Technologies
Assuming the 90 days horizon BASF SE ADR is expected to under-perform the Angstrom Technologies. But the otc stock apears to be less risky and, when comparing its historical volatility, BASF SE ADR is 1.79 times less risky than Angstrom Technologies. The otc stock trades about -0.2 of its potential returns per unit of risk. The Angstrom Technologies is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Angstrom Technologies on August 29, 2024 and sell it today you would lose (1.00) from holding Angstrom Technologies or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BASF SE ADR vs. Angstrom Technologies
Performance |
| Timeline |
| BASF SE ADR |
| Angstrom Technologies |
BASF SE and Angstrom Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BASF SE and Angstrom Technologies
The main advantage of trading using opposite BASF SE and Angstrom Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BASF SE position performs unexpectedly, Angstrom Technologies 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 Angstrom Technologies will offset losses from the drop in Angstrom Technologies' long position.| BASF SE vs. Shin Etsu Chemical Co | BASF SE vs. Shin Etsu Chemical Co | BASF SE vs. First Graphene | BASF SE vs. Huntsman |
| Angstrom Technologies vs. Celanese | Angstrom Technologies vs. Huntsman | Angstrom Technologies vs. BASF SE ADR | Angstrom Technologies vs. Tronox Holdings PLC |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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