Correlation Between CHIBA BANK and Volkswagen
Can any of the company-specific risk be diversified away by investing in both CHIBA BANK 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 CHIBA BANK and Volkswagen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHIBA BANK and Volkswagen AG, you can compare the effects of market volatilities on CHIBA BANK 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 CHIBA BANK with a short position of Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHIBA BANK and Volkswagen.
Diversification Opportunities for CHIBA BANK and Volkswagen
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CHIBA and Volkswagen is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding CHIBA BANK and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG and CHIBA BANK 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 CHIBA BANK 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 CHIBA BANK i.e., CHIBA BANK and Volkswagen go up and down completely randomly.
Pair Corralation between CHIBA BANK and Volkswagen
Assuming the 90 days trading horizon CHIBA BANK is expected to generate 1.33 times more return on investment than Volkswagen. However, CHIBA BANK is 1.33 times more volatile than Volkswagen AG. It trades about 0.04 of its potential returns per unit of risk. Volkswagen AG is currently generating about -0.05 per unit of risk. If you would invest 565.00 in CHIBA BANK on September 2, 2024 and sell it today you would earn a total of 215.00 from holding CHIBA BANK or generate 38.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHIBA BANK vs. Volkswagen AG
Performance |
| Timeline |
| CHIBA BANK |
| Volkswagen AG |
CHIBA BANK and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHIBA BANK and Volkswagen
The main advantage of trading using opposite CHIBA BANK and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHIBA BANK 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.| CHIBA BANK vs. SIVERS SEMICONDUCTORS AB | CHIBA BANK vs. Darden Restaurants | CHIBA BANK vs. Reliance Steel Aluminum | CHIBA BANK vs. Q2M Managementberatung AG |
| Volkswagen vs. BlueScope Steel Limited | Volkswagen vs. Micron Technology | Volkswagen vs. DXC Technology Co | Volkswagen vs. Vishay Intertechnology |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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