Correlation Between CeoTronics and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both CeoTronics and Thyssenkrupp 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 CeoTronics and Thyssenkrupp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CeoTronics AG and thyssenkrupp AG, you can compare the effects of market volatilities on CeoTronics and Thyssenkrupp 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 CeoTronics with a short position of Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CeoTronics and Thyssenkrupp.
Diversification Opportunities for CeoTronics and Thyssenkrupp
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CeoTronics and Thyssenkrupp is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG and CeoTronics 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 CeoTronics AG are associated (or correlated) with Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of CeoTronics i.e., CeoTronics and Thyssenkrupp go up and down completely randomly.
Pair Corralation between CeoTronics and Thyssenkrupp
Assuming the 90 days trading horizon CeoTronics is expected to generate 3.16 times less return on investment than Thyssenkrupp. But when comparing it to its historical volatility, CeoTronics AG is 1.37 times less risky than Thyssenkrupp. It trades about 0.01 of its potential returns per unit of risk. thyssenkrupp AG is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 404.00 in thyssenkrupp AG on September 19, 2024 and sell it today you would lose (4.00) from holding thyssenkrupp AG or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CeoTronics AG vs. thyssenkrupp AG
Performance |
| Timeline |
| CeoTronics AG |
| thyssenkrupp AG |
CeoTronics and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CeoTronics and Thyssenkrupp
The main advantage of trading using opposite CeoTronics and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CeoTronics position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.| CeoTronics vs. Ryanair Holdings plc | CeoTronics vs. Automatic Data Processing | CeoTronics vs. National Storage Affiliates | CeoTronics vs. SEALED AIR |
| Thyssenkrupp vs. CeoTronics AG | Thyssenkrupp vs. Tencent Music Entertainment | Thyssenkrupp vs. CNVISION MEDIA | Thyssenkrupp vs. Seven West Media |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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