Correlation Between De Grey and Volkswagen
Can any of the company-specific risk be diversified away by investing in both De Grey and Volkswagen 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 De Grey and Volkswagen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Grey Mining and Volkswagen AG, you can compare the effects of market volatilities on De Grey and Volkswagen 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 De Grey with a short position of Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Volkswagen.
Diversification Opportunities for De Grey and Volkswagen
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between DGD and Volkswagen is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG and De Grey 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 De Grey Mining are associated (or correlated) with Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of De Grey i.e., De Grey and Volkswagen go up and down completely randomly.
Pair Corralation between De Grey and Volkswagen
Assuming the 90 days trading horizon De Grey Mining is expected to generate 1.15 times more return on investment than Volkswagen. However, De Grey is 1.15 times more volatile than Volkswagen AG. It trades about 0.53 of its potential returns per unit of risk. Volkswagen AG is currently generating about 0.23 per unit of risk. If you would invest 104.00 in De Grey Mining on October 25, 2024 and sell it today you would earn a total of 15.00 from holding De Grey Mining or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
De Grey Mining vs. Volkswagen AG
Performance |
| Timeline |
| De Grey Mining |
| Volkswagen AG |
De Grey and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Volkswagen
The main advantage of trading using opposite De Grey and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| De Grey vs. VIENNA INSURANCE GR | De Grey vs. Japan Post Insurance | De Grey vs. Safety Insurance Group | De Grey vs. UNIQA INSURANCE GR |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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