Correlation Between China Xuefeng and Bayerische Motoren
Can any of the company-specific risk be diversified away by investing in both China Xuefeng and Bayerische Motoren 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 China Xuefeng and Bayerische Motoren into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Xuefeng Environmental and Bayerische Motoren Werke, you can compare the effects of market volatilities on China Xuefeng and Bayerische Motoren 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 China Xuefeng with a short position of Bayerische Motoren. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Xuefeng and Bayerische Motoren.
Diversification Opportunities for China Xuefeng and Bayerische Motoren
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and Bayerische is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding China Xuefeng Environmental and Bayerische Motoren Werke in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayerische Motoren Werke and China Xuefeng 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 China Xuefeng Environmental are associated (or correlated) with Bayerische Motoren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayerische Motoren Werke has no effect on the direction of China Xuefeng i.e., China Xuefeng and Bayerische Motoren go up and down completely randomly.
Pair Corralation between China Xuefeng and Bayerische Motoren
If you would invest 2.00 in China Xuefeng Environmental on October 21, 2024 and sell it today you would earn a total of 1.00 from holding China Xuefeng Environmental or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
China Xuefeng Environmental vs. Bayerische Motoren Werke
Performance |
| Timeline |
| China Xuefeng Enviro |
| Bayerische Motoren Werke |
China Xuefeng and Bayerische Motoren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Xuefeng and Bayerische Motoren
The main advantage of trading using opposite China Xuefeng and Bayerische Motoren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Xuefeng position performs unexpectedly, Bayerische Motoren 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 Bayerische Motoren will offset losses from the drop in Bayerische Motoren's long position.| China Xuefeng vs. Isuzu Motors | China Xuefeng vs. Honda Motor Co | China Xuefeng vs. Porsche Automobil Holding | China Xuefeng vs. Mazda Motor Corp |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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