Correlation Between CureVac NV and Western Midstream
Can any of the company-specific risk be diversified away by investing in both CureVac NV and Western Midstream 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 CureVac NV and Western Midstream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CureVac NV and Western Midstream Partners, you can compare the effects of market volatilities on CureVac NV and Western Midstream 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 CureVac NV with a short position of Western Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of CureVac NV and Western Midstream.
Diversification Opportunities for CureVac NV and Western Midstream
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CureVac and Western is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding CureVac NV and Western Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Midstream and CureVac NV 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 CureVac NV are associated (or correlated) with Western Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Midstream has no effect on the direction of CureVac NV i.e., CureVac NV and Western Midstream go up and down completely randomly.
Pair Corralation between CureVac NV and Western Midstream
Given the investment horizon of 90 days CureVac NV is expected to under-perform the Western Midstream. In addition to that, CureVac NV is 2.75 times more volatile than Western Midstream Partners. It trades about -0.03 of its total potential returns per unit of risk. Western Midstream Partners is currently generating about 0.09 per unit of volatility. If you would invest 2,275 in Western Midstream Partners on October 25, 2024 and sell it today you would earn a total of 1,932 from holding Western Midstream Partners or generate 84.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CureVac NV vs. Western Midstream Partners
Performance |
| Timeline |
| CureVac NV |
| Western Midstream |
CureVac NV and Western Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CureVac NV and Western Midstream
The main advantage of trading using opposite CureVac NV and Western Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CureVac NV position performs unexpectedly, Western Midstream 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 Western Midstream will offset losses from the drop in Western Midstream's long position.| CureVac NV vs. Western Midstream Partners | CureVac NV vs. Kinetik Holdings | CureVac NV vs. Lithium Americas Corp | CureVac NV vs. Enlight Renewable Energy |
| Western Midstream vs. DT Midstream | Western Midstream vs. MPLX LP | Western Midstream vs. Plains All American | Western Midstream vs. Genesis Energy LP |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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