Correlation Between Evonik Industries and Fuchs Petrolub
Can any of the company-specific risk be diversified away by investing in both Evonik Industries and Fuchs Petrolub 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 Fuchs Petrolub 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 Fuchs Petrolub SE, you can compare the effects of market volatilities on Evonik Industries and Fuchs Petrolub 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 Fuchs Petrolub. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evonik Industries and Fuchs Petrolub.
Diversification Opportunities for Evonik Industries and Fuchs Petrolub
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Evonik and Fuchs is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Evonik Industries AG and Fuchs Petrolub SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuchs Petrolub SE 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 Fuchs Petrolub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuchs Petrolub SE has no effect on the direction of Evonik Industries i.e., Evonik Industries and Fuchs Petrolub go up and down completely randomly.
Pair Corralation between Evonik Industries and Fuchs Petrolub
Assuming the 90 days horizon Evonik Industries AG is expected to under-perform the Fuchs Petrolub. In addition to that, Evonik Industries is 1.48 times more volatile than Fuchs Petrolub SE. It trades about -0.08 of its total potential returns per unit of risk. Fuchs Petrolub SE is currently generating about 0.07 per unit of volatility. If you would invest 1,061 in Fuchs Petrolub SE on September 12, 2024 and sell it today you would earn a total of 66.00 from holding Fuchs Petrolub SE or generate 6.22% 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. Fuchs Petrolub SE
Performance |
| Timeline |
| Evonik Industries |
| Fuchs Petrolub SE |
Evonik Industries and Fuchs Petrolub Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evonik Industries and Fuchs Petrolub
The main advantage of trading using opposite Evonik Industries and Fuchs Petrolub positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evonik Industries position performs unexpectedly, Fuchs Petrolub 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 Fuchs Petrolub will offset losses from the drop in Fuchs Petrolub's long position.| Evonik Industries vs. Symrise Ag PK | Evonik Industries vs. Fuchs Petrolub SE | Evonik Industries vs. Innospec | Evonik Industries vs. Air Liquide SA |
| Fuchs Petrolub vs. Chemours Co | Fuchs Petrolub vs. International Flavors Fragrances | Fuchs Petrolub vs. Air Products and | Fuchs Petrolub vs. PPG Industries |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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