Correlation Between Brockhaus Capital and Gelsenwasser
Can any of the company-specific risk be diversified away by investing in both Brockhaus Capital and Gelsenwasser 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 Brockhaus Capital and Gelsenwasser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brockhaus Capital Management and Gelsenwasser AG, you can compare the effects of market volatilities on Brockhaus Capital and Gelsenwasser 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 Brockhaus Capital with a short position of Gelsenwasser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brockhaus Capital and Gelsenwasser.
Diversification Opportunities for Brockhaus Capital and Gelsenwasser
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brockhaus and Gelsenwasser is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Brockhaus Capital Management and Gelsenwasser AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gelsenwasser AG and Brockhaus Capital 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 Brockhaus Capital Management are associated (or correlated) with Gelsenwasser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gelsenwasser AG has no effect on the direction of Brockhaus Capital i.e., Brockhaus Capital and Gelsenwasser go up and down completely randomly.
Pair Corralation between Brockhaus Capital and Gelsenwasser
Assuming the 90 days trading horizon Brockhaus Capital Management is expected to generate 0.81 times more return on investment than Gelsenwasser. However, Brockhaus Capital Management is 1.24 times less risky than Gelsenwasser. It trades about -0.06 of its potential returns per unit of risk. Gelsenwasser AG is currently generating about -0.1 per unit of risk. If you would invest 2,350 in Brockhaus Capital Management on September 12, 2024 and sell it today you would lose (80.00) from holding Brockhaus Capital Management or give up 3.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brockhaus Capital Management vs. Gelsenwasser AG
Performance |
| Timeline |
| Brockhaus Capital |
| Gelsenwasser AG |
Brockhaus Capital and Gelsenwasser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brockhaus Capital and Gelsenwasser
The main advantage of trading using opposite Brockhaus Capital and Gelsenwasser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brockhaus Capital position performs unexpectedly, Gelsenwasser 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 Gelsenwasser will offset losses from the drop in Gelsenwasser's long position.| Brockhaus Capital vs. Ameriprise Financial | Brockhaus Capital vs. Ares Management Corp | Brockhaus Capital vs. Superior Plus Corp | Brockhaus Capital vs. SIVERS SEMICONDUCTORS AB |
| Gelsenwasser vs. United Utilities Group | Gelsenwasser vs. Guangdong Investment Limited | Gelsenwasser vs. China Water Affairs | Gelsenwasser vs. Superior Plus Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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