Correlation Between Continental Aktiengesellscha and ACCSYS TECHPLC
Can any of the company-specific risk be diversified away by investing in both Continental Aktiengesellscha and ACCSYS TECHPLC 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 Continental Aktiengesellscha and ACCSYS TECHPLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Continental Aktiengesellschaft and ACCSYS TECHPLC EO, you can compare the effects of market volatilities on Continental Aktiengesellscha and ACCSYS TECHPLC 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 Continental Aktiengesellscha with a short position of ACCSYS TECHPLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Aktiengesellscha and ACCSYS TECHPLC.
Diversification Opportunities for Continental Aktiengesellscha and ACCSYS TECHPLC
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Continental and ACCSYS is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Continental Aktiengesellschaft and ACCSYS TECHPLC EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACCSYS TECHPLC EO and Continental Aktiengesellscha 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 Continental Aktiengesellschaft are associated (or correlated) with ACCSYS TECHPLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACCSYS TECHPLC EO has no effect on the direction of Continental Aktiengesellscha i.e., Continental Aktiengesellscha and ACCSYS TECHPLC go up and down completely randomly.
Pair Corralation between Continental Aktiengesellscha and ACCSYS TECHPLC
Assuming the 90 days trading horizon Continental Aktiengesellschaft is expected to generate 0.51 times more return on investment than ACCSYS TECHPLC. However, Continental Aktiengesellschaft is 1.96 times less risky than ACCSYS TECHPLC. It trades about 0.28 of its potential returns per unit of risk. ACCSYS TECHPLC EO is currently generating about -0.02 per unit of risk. If you would invest 6,138 in Continental Aktiengesellschaft on September 15, 2024 and sell it today you would earn a total of 526.00 from holding Continental Aktiengesellschaft or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Continental Aktiengesellschaft vs. ACCSYS TECHPLC EO
Performance |
| Timeline |
| Continental Aktiengesellscha |
| ACCSYS TECHPLC EO |
Continental Aktiengesellscha and ACCSYS TECHPLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental Aktiengesellscha and ACCSYS TECHPLC
The main advantage of trading using opposite Continental Aktiengesellscha and ACCSYS TECHPLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental Aktiengesellscha position performs unexpectedly, ACCSYS TECHPLC 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 ACCSYS TECHPLC will offset losses from the drop in ACCSYS TECHPLC's long position.The idea behind Continental Aktiengesellschaft and ACCSYS TECHPLC EO pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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