Correlation Between DIeteren Group and Penske Automotive
Can any of the company-specific risk be diversified away by investing in both DIeteren Group and Penske Automotive 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 DIeteren Group and Penske Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DIeteren Group SA and Penske Automotive Group, you can compare the effects of market volatilities on DIeteren Group and Penske Automotive 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 DIeteren Group with a short position of Penske Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIeteren Group and Penske Automotive.
Diversification Opportunities for DIeteren Group and Penske Automotive
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DIeteren and Penske is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding DIeteren Group SA and Penske Automotive Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penske Automotive and DIeteren Group 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 DIeteren Group SA are associated (or correlated) with Penske Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penske Automotive has no effect on the direction of DIeteren Group i.e., DIeteren Group and Penske Automotive go up and down completely randomly.
Pair Corralation between DIeteren Group and Penske Automotive
Assuming the 90 days trading horizon DIeteren Group SA is expected to generate 3.89 times more return on investment than Penske Automotive. However, DIeteren Group is 3.89 times more volatile than Penske Automotive Group. It trades about 0.23 of its potential returns per unit of risk. Penske Automotive Group is currently generating about -0.15 per unit of risk. If you would invest 13,247 in DIeteren Group SA on September 24, 2024 and sell it today you would earn a total of 2,993 from holding DIeteren Group SA or generate 22.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DIeteren Group SA vs. Penske Automotive Group
Performance |
| Timeline |
| DIeteren Group SA |
| Penske Automotive |
DIeteren Group and Penske Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DIeteren Group and Penske Automotive
The main advantage of trading using opposite DIeteren Group and Penske Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIeteren Group position performs unexpectedly, Penske Automotive 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 Penske Automotive will offset losses from the drop in Penske Automotive's long position.| DIeteren Group vs. Copart Inc | DIeteren Group vs. Zhongsheng Group Holdings | DIeteren Group vs. CarMax Inc | DIeteren Group vs. Penske Automotive Group |
| Penske Automotive vs. Copart Inc | Penske Automotive vs. Zhongsheng Group Holdings | Penske Automotive vs. CarMax Inc | Penske Automotive vs. DIeteren Group SA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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