Correlation Between Bayerische Motoren and Exor NV
Can any of the company-specific risk be diversified away by investing in both Bayerische Motoren and Exor NV 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 Bayerische Motoren and Exor NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayerische Motoren Werke and Exor NV, you can compare the effects of market volatilities on Bayerische Motoren and Exor NV 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 Bayerische Motoren with a short position of Exor NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayerische Motoren and Exor NV.
Diversification Opportunities for Bayerische Motoren and Exor NV
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bayerische and Exor is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bayerische Motoren Werke and Exor NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exor NV and Bayerische Motoren 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 Bayerische Motoren Werke are associated (or correlated) with Exor NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exor NV has no effect on the direction of Bayerische Motoren i.e., Bayerische Motoren and Exor NV go up and down completely randomly.
Pair Corralation between Bayerische Motoren and Exor NV
Assuming the 90 days horizon Bayerische Motoren Werke is expected to generate 0.85 times more return on investment than Exor NV. However, Bayerische Motoren Werke is 1.17 times less risky than Exor NV. It trades about 0.44 of its potential returns per unit of risk. Exor NV is currently generating about -0.06 per unit of risk. If you would invest 2,406 in Bayerische Motoren Werke on September 12, 2024 and sell it today you would earn a total of 374.00 from holding Bayerische Motoren Werke or generate 15.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayerische Motoren Werke vs. Exor NV
Performance |
| Timeline |
| Bayerische Motoren Werke |
| Exor NV |
Bayerische Motoren and Exor NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayerische Motoren and Exor NV
The main advantage of trading using opposite Bayerische Motoren and Exor NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayerische Motoren position performs unexpectedly, Exor NV 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 Exor NV will offset losses from the drop in Exor NV's long position.| Bayerische Motoren vs. Volkswagen AG 110 | Bayerische Motoren vs. Porsche Automobil Holding | Bayerische Motoren vs. Ferrari NV | Bayerische Motoren vs. Porsche Automobile Holding |
| Exor NV vs. Zapp Electric Vehicles | Exor NV vs. Guangzhou Automobile Group | Exor NV vs. NFI Group | Exor NV vs. Honda Motor Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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