Correlation Between Continental and Continental Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Continental and Continental Aktiengesellscha 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 and Continental Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Continental AG PK and Continental Aktiengesellschaft, you can compare the effects of market volatilities on Continental and Continental Aktiengesellscha 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 with a short position of Continental Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental and Continental Aktiengesellscha.
Diversification Opportunities for Continental and Continental Aktiengesellscha
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Continental and Continental is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Continental AG PK and Continental Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Aktiengesellscha and Continental 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 AG PK are associated (or correlated) with Continental Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Aktiengesellscha has no effect on the direction of Continental i.e., Continental and Continental Aktiengesellscha go up and down completely randomly.
Pair Corralation between Continental and Continental Aktiengesellscha
Assuming the 90 days horizon Continental AG PK is expected to generate 0.67 times more return on investment than Continental Aktiengesellscha. However, Continental AG PK is 1.48 times less risky than Continental Aktiengesellscha. It trades about 0.22 of its potential returns per unit of risk. Continental Aktiengesellschaft is currently generating about 0.14 per unit of risk. If you would invest 652.00 in Continental AG PK on November 3, 2024 and sell it today you would earn a total of 52.00 from holding Continental AG PK or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Continental AG PK vs. Continental Aktiengesellschaft
Performance |
| Timeline |
| Continental AG PK |
| Continental Aktiengesellscha |
Continental and Continental Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental and Continental Aktiengesellscha
The main advantage of trading using opposite Continental and Continental Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental position performs unexpectedly, Continental Aktiengesellscha 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 Continental Aktiengesellscha will offset losses from the drop in Continental Aktiengesellscha's long position.| Continental vs. Compagnie Gnrale des | Continental vs. Bridgestone Corp ADR | Continental vs. Continental Aktiengesellschaft | Continental vs. Douglas Dynamics |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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