Correlation Between AVIS BUDGET and CEWE Stiftung
Can any of the company-specific risk be diversified away by investing in both AVIS BUDGET and CEWE Stiftung 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 AVIS BUDGET and CEWE Stiftung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVIS BUDGET GROUP and CEWE Stiftung Co, you can compare the effects of market volatilities on AVIS BUDGET and CEWE Stiftung 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 AVIS BUDGET with a short position of CEWE Stiftung. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVIS BUDGET and CEWE Stiftung.
Diversification Opportunities for AVIS BUDGET and CEWE Stiftung
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AVIS and CEWE is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding AVIS BUDGET GROUP and CEWE Stiftung Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEWE Stiftung and AVIS BUDGET 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 AVIS BUDGET GROUP are associated (or correlated) with CEWE Stiftung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEWE Stiftung has no effect on the direction of AVIS BUDGET i.e., AVIS BUDGET and CEWE Stiftung go up and down completely randomly.
Pair Corralation between AVIS BUDGET and CEWE Stiftung
Assuming the 90 days trading horizon AVIS BUDGET GROUP is expected to generate 3.18 times more return on investment than CEWE Stiftung. However, AVIS BUDGET is 3.18 times more volatile than CEWE Stiftung Co. It trades about 0.01 of its potential returns per unit of risk. CEWE Stiftung Co is currently generating about -0.05 per unit of risk. If you would invest 9,900 in AVIS BUDGET GROUP on September 5, 2024 and sell it today you would lose (382.00) from holding AVIS BUDGET GROUP or give up 3.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVIS BUDGET GROUP vs. CEWE Stiftung Co
Performance |
| Timeline |
| AVIS BUDGET GROUP |
| CEWE Stiftung |
AVIS BUDGET and CEWE Stiftung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVIS BUDGET and CEWE Stiftung
The main advantage of trading using opposite AVIS BUDGET and CEWE Stiftung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVIS BUDGET position performs unexpectedly, CEWE Stiftung 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 CEWE Stiftung will offset losses from the drop in CEWE Stiftung's long position.| AVIS BUDGET vs. TOTAL GABON | AVIS BUDGET vs. Walgreens Boots Alliance | AVIS BUDGET vs. Peak Resources Limited |
| CEWE Stiftung vs. BOYD GROUP SERVICES | CEWE Stiftung vs. Frontdoor | CEWE Stiftung vs. CVS Group plc | CEWE Stiftung vs. Gesundheitswelt Chiemgau AG |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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