Correlation Between BII Railway and Salzgitter
Can any of the company-specific risk be diversified away by investing in both BII Railway and Salzgitter 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 BII Railway and Salzgitter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BII Railway Transportation and Salzgitter AG, you can compare the effects of market volatilities on BII Railway and Salzgitter 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 BII Railway with a short position of Salzgitter. Check out your portfolio center. Please also check ongoing floating volatility patterns of BII Railway and Salzgitter.
Diversification Opportunities for BII Railway and Salzgitter
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between BII and Salzgitter is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding BII Railway Transportation and Salzgitter AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salzgitter AG and BII Railway 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 BII Railway Transportation are associated (or correlated) with Salzgitter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salzgitter AG has no effect on the direction of BII Railway i.e., BII Railway and Salzgitter go up and down completely randomly.
Pair Corralation between BII Railway and Salzgitter
Assuming the 90 days horizon BII Railway Transportation is expected to under-perform the Salzgitter. But the stock apears to be less risky and, when comparing its historical volatility, BII Railway Transportation is 1.46 times less risky than Salzgitter. The stock trades about -0.04 of its potential returns per unit of risk. The Salzgitter AG is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,610 in Salzgitter AG on November 3, 2024 and sell it today you would earn a total of 179.00 from holding Salzgitter AG or generate 11.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BII Railway Transportation vs. Salzgitter AG
Performance |
| Timeline |
| BII Railway Transpor |
| Salzgitter AG |
BII Railway and Salzgitter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BII Railway and Salzgitter
The main advantage of trading using opposite BII Railway and Salzgitter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BII Railway position performs unexpectedly, Salzgitter 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 Salzgitter will offset losses from the drop in Salzgitter's long position.| BII Railway vs. Accenture plc | BII Railway vs. International Business Machines | BII Railway vs. International Business Machines | BII Railway vs. Capgemini SE |
| Salzgitter vs. DATATEC LTD 2 | Salzgitter vs. TERADATA | Salzgitter vs. United Airlines Holdings | Salzgitter vs. SINGAPORE AIRLINES |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stocks Directory Find actively traded stocks across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |