Correlation Between Bayerische Motoren and Hino Motors
Can any of the company-specific risk be diversified away by investing in both Bayerische Motoren and Hino Motors 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 Hino Motors 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 Hino Motors Ltd, you can compare the effects of market volatilities on Bayerische Motoren and Hino Motors 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 Hino Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayerische Motoren and Hino Motors.
Diversification Opportunities for Bayerische Motoren and Hino Motors
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bayerische and Hino is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bayerische Motoren Werke and Hino Motors Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hino Motors 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 Hino Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hino Motors has no effect on the direction of Bayerische Motoren i.e., Bayerische Motoren and Hino Motors go up and down completely randomly.
Pair Corralation between Bayerische Motoren and Hino Motors
If you would invest 3,203 in Hino Motors Ltd on October 22, 2024 and sell it today you would earn a total of 117.00 from holding Hino Motors Ltd or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 5.56% |
| Values | Daily Returns |
Bayerische Motoren Werke vs. Hino Motors Ltd
Performance |
| Timeline |
| Bayerische Motoren Werke |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Hino Motors |
Bayerische Motoren and Hino Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayerische Motoren and Hino Motors
The main advantage of trading using opposite Bayerische Motoren and Hino Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayerische Motoren position performs unexpectedly, Hino Motors 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 Hino Motors will offset losses from the drop in Hino Motors' long position.| Bayerische Motoren vs. Mercedes Benz Group AG | Bayerische Motoren vs. Porsche Automobile Holding | Bayerische Motoren vs. Volkswagen AG 110 | Bayerische Motoren vs. Mercedes Benz Group AG |
| Hino Motors vs. Daimler Truck Holding | Hino Motors vs. Volvo AB ADR | Hino Motors vs. Columbus McKinnon | Hino Motors vs. Hyster Yale Materials Handling |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |