Correlation Between Evonik Industries and COFCO Joycome
Can any of the company-specific risk be diversified away by investing in both Evonik Industries and COFCO Joycome 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 Evonik Industries and COFCO Joycome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evonik Industries AG and COFCO Joycome Foods, you can compare the effects of market volatilities on Evonik Industries and COFCO Joycome 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 Evonik Industries with a short position of COFCO Joycome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evonik Industries and COFCO Joycome.
Diversification Opportunities for Evonik Industries and COFCO Joycome
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Evonik and COFCO is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Evonik Industries AG and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods and Evonik Industries 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 Evonik Industries AG are associated (or correlated) with COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of Evonik Industries i.e., Evonik Industries and COFCO Joycome go up and down completely randomly.
Pair Corralation between Evonik Industries and COFCO Joycome
Assuming the 90 days trading horizon Evonik Industries AG is expected to generate 0.34 times more return on investment than COFCO Joycome. However, Evonik Industries AG is 2.94 times less risky than COFCO Joycome. It trades about 0.01 of its potential returns per unit of risk. COFCO Joycome Foods is currently generating about 0.0 per unit of risk. If you would invest 1,732 in Evonik Industries AG on September 12, 2024 and sell it today you would earn a total of 63.00 from holding Evonik Industries AG or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evonik Industries AG vs. COFCO Joycome Foods
Performance |
| Timeline |
| Evonik Industries |
| COFCO Joycome Foods |
Evonik Industries and COFCO Joycome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evonik Industries and COFCO Joycome
The main advantage of trading using opposite Evonik Industries and COFCO Joycome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evonik Industries position performs unexpectedly, COFCO Joycome 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 COFCO Joycome will offset losses from the drop in COFCO Joycome's long position.| Evonik Industries vs. Aluminum of | Evonik Industries vs. SIMS METAL MGT | Evonik Industries vs. Microchip Technology Incorporated | Evonik Industries vs. PARKEN Sport Entertainment |
| COFCO Joycome vs. Hormel Foods | COFCO Joycome vs. Superior Plus Corp | COFCO Joycome vs. SIVERS SEMICONDUCTORS AB | COFCO Joycome vs. NorAm Drilling AS |
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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