Correlation Between Chiba Bank and Grenke AG
Can any of the company-specific risk be diversified away by investing in both Chiba Bank and Grenke AG 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 Grenke AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chiba Bank and Grenke AG, you can compare the effects of market volatilities on Chiba Bank and Grenke AG 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 Grenke AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiba Bank and Grenke AG.
Diversification Opportunities for Chiba Bank and Grenke AG
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chiba and Grenke is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Chiba Bank and Grenke AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grenke 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 Grenke AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grenke AG has no effect on the direction of Chiba Bank i.e., Chiba Bank and Grenke AG go up and down completely randomly.
Pair Corralation between Chiba Bank and Grenke AG
Assuming the 90 days horizon Chiba Bank is expected to generate 0.89 times more return on investment than Grenke AG. However, Chiba Bank is 1.13 times less risky than Grenke AG. It trades about 0.05 of its potential returns per unit of risk. Grenke AG is currently generating about -0.03 per unit of risk. If you would invest 660.00 in Chiba Bank on November 4, 2024 and sell it today you would earn a total of 150.00 from holding Chiba Bank or generate 22.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiba Bank vs. Grenke AG
Performance |
| Timeline |
| Chiba Bank |
| Grenke AG |
Chiba Bank and Grenke AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiba Bank and Grenke AG
The main advantage of trading using opposite Chiba Bank and Grenke AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiba Bank position performs unexpectedly, Grenke AG 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 Grenke AG will offset losses from the drop in Grenke AG's long position.| Chiba Bank vs. CVR Medical Corp | Chiba Bank vs. Nippon Light Metal | Chiba Bank vs. Inspire Medical Systems | Chiba Bank vs. PARKEN Sport Entertainment |
| Grenke AG vs. H2O Retailing | Grenke AG vs. CarsalesCom | Grenke AG vs. Indutrade AB | Grenke AG vs. TRADELINK ELECTRON |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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