Correlation Between Daimler Truck and AGCO
Can any of the company-specific risk be diversified away by investing in both Daimler Truck and AGCO 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 Daimler Truck and AGCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daimler Truck Holding and AGCO Corporation, you can compare the effects of market volatilities on Daimler Truck and AGCO 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 Daimler Truck with a short position of AGCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daimler Truck and AGCO.
Diversification Opportunities for Daimler Truck and AGCO
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daimler and AGCO is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Daimler Truck Holding and AGCO Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGCO and Daimler Truck 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 Daimler Truck Holding are associated (or correlated) with AGCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGCO has no effect on the direction of Daimler Truck i.e., Daimler Truck and AGCO go up and down completely randomly.
Pair Corralation between Daimler Truck and AGCO
Assuming the 90 days horizon Daimler Truck Holding is expected to generate 1.0 times more return on investment than AGCO. However, Daimler Truck Holding is 1.0 times less risky than AGCO. It trades about 0.12 of its potential returns per unit of risk. AGCO Corporation is currently generating about -0.14 per unit of risk. If you would invest 2,103 in Daimler Truck Holding on November 28, 2024 and sell it today you would earn a total of 128.00 from holding Daimler Truck Holding or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daimler Truck Holding vs. AGCO Corp.
Performance |
| Timeline |
| Daimler Truck Holding |
| AGCO |
Daimler Truck and AGCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daimler Truck and AGCO
The main advantage of trading using opposite Daimler Truck and AGCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daimler Truck position performs unexpectedly, AGCO 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 AGCO will offset losses from the drop in AGCO's long position.| Daimler Truck vs. Volvo AB ADR | Daimler Truck vs. Deere Company | Daimler Truck vs. Volvo AB ser | Daimler Truck vs. Oshkosh |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |