Correlation Between Electro Ao and Schulz SA
Can any of the company-specific risk be diversified away by investing in both Electro Ao and Schulz SA 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 Electro Ao and Schulz SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electro Ao Altona and Schulz SA, you can compare the effects of market volatilities on Electro Ao and Schulz SA 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 Electro Ao with a short position of Schulz SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electro Ao and Schulz SA.
Diversification Opportunities for Electro Ao and Schulz SA
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Electro and Schulz is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Electro Ao Altona and Schulz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schulz SA and Electro Ao 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 Electro Ao Altona are associated (or correlated) with Schulz SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schulz SA has no effect on the direction of Electro Ao i.e., Electro Ao and Schulz SA go up and down completely randomly.
Pair Corralation between Electro Ao and Schulz SA
Assuming the 90 days trading horizon Electro Ao Altona is expected to generate 1.32 times more return on investment than Schulz SA. However, Electro Ao is 1.32 times more volatile than Schulz SA. It trades about 0.07 of its potential returns per unit of risk. Schulz SA is currently generating about 0.05 per unit of risk. If you would invest 661.00 in Electro Ao Altona on November 28, 2024 and sell it today you would earn a total of 650.00 from holding Electro Ao Altona or generate 98.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electro Ao Altona vs. Schulz SA
Performance |
| Timeline |
| Electro Ao Altona |
| Schulz SA |
Electro Ao and Schulz SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electro Ao and Schulz SA
The main advantage of trading using opposite Electro Ao and Schulz SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electro Ao position performs unexpectedly, Schulz SA 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 Schulz SA will offset losses from the drop in Schulz SA's long position.| Electro Ao vs. Micron Technology | Electro Ao vs. SSC Technologies Holdings, | Electro Ao vs. Cognizant Technology Solutions | Electro Ao vs. Fair Isaac |
| Schulz SA vs. PBG SA | Schulz SA vs. Movida Participaes SA | Schulz SA vs. Tupy SA | Schulz SA vs. Petro Rio 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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