Correlation Between BEIJJINGNENG CLERGHYC1 and Volkswagen
Can any of the company-specific risk be diversified away by investing in both BEIJJINGNENG CLERGHYC1 and Volkswagen 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 BEIJJINGNENG CLERGHYC1 and Volkswagen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEIJJINGNENG CLERGHYC1 and Volkswagen AG, you can compare the effects of market volatilities on BEIJJINGNENG CLERGHYC1 and Volkswagen 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 BEIJJINGNENG CLERGHYC1 with a short position of Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEIJJINGNENG CLERGHYC1 and Volkswagen.
Diversification Opportunities for BEIJJINGNENG CLERGHYC1 and Volkswagen
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between BEIJJINGNENG and Volkswagen is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding BEIJJINGNENG CLERGHYC1 and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG and BEIJJINGNENG CLERGHYC1 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 BEIJJINGNENG CLERGHYC1 are associated (or correlated) with Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of BEIJJINGNENG CLERGHYC1 i.e., BEIJJINGNENG CLERGHYC1 and Volkswagen go up and down completely randomly.
Pair Corralation between BEIJJINGNENG CLERGHYC1 and Volkswagen
Assuming the 90 days horizon BEIJJINGNENG CLERGHYC1 is expected to generate 4.17 times more return on investment than Volkswagen. However, BEIJJINGNENG CLERGHYC1 is 4.17 times more volatile than Volkswagen AG. It trades about 0.06 of its potential returns per unit of risk. Volkswagen AG is currently generating about -0.49 per unit of risk. If you would invest 22.00 in BEIJJINGNENG CLERGHYC1 on August 27, 2024 and sell it today you would earn a total of 1.00 from holding BEIJJINGNENG CLERGHYC1 or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BEIJJINGNENG CLERGHYC1 vs. Volkswagen AG
Performance |
| Timeline |
| BEIJJINGNENG CLERGHYC1 |
| Volkswagen AG |
BEIJJINGNENG CLERGHYC1 and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BEIJJINGNENG CLERGHYC1 and Volkswagen
The main advantage of trading using opposite BEIJJINGNENG CLERGHYC1 and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEIJJINGNENG CLERGHYC1 position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| BEIJJINGNENG CLERGHYC1 vs. VERBUND AG ADR | BEIJJINGNENG CLERGHYC1 vs. Superior Plus Corp | BEIJJINGNENG CLERGHYC1 vs. Origin Agritech | BEIJJINGNENG CLERGHYC1 vs. Identiv |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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