Correlation Between COMMERCIAL VEHICLE and Klöckner
Can any of the company-specific risk be diversified away by investing in both COMMERCIAL VEHICLE and Klöckner 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 COMMERCIAL VEHICLE and Klöckner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMMERCIAL VEHICLE and Klckner Co SE, you can compare the effects of market volatilities on COMMERCIAL VEHICLE and Klöckner 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 COMMERCIAL VEHICLE with a short position of Klöckner. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMMERCIAL VEHICLE and Klöckner.
Diversification Opportunities for COMMERCIAL VEHICLE and Klöckner
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between COMMERCIAL and Klöckner is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding COMMERCIAL VEHICLE and Klckner Co SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klckner Co SE and COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE are associated (or correlated) with Klöckner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klckner Co SE has no effect on the direction of COMMERCIAL VEHICLE i.e., COMMERCIAL VEHICLE and Klöckner go up and down completely randomly.
Pair Corralation between COMMERCIAL VEHICLE and Klöckner
Assuming the 90 days trading horizon COMMERCIAL VEHICLE is expected to under-perform the Klöckner. In addition to that, COMMERCIAL VEHICLE is 2.6 times more volatile than Klckner Co SE. It trades about -0.12 of its total potential returns per unit of risk. Klckner Co SE is currently generating about -0.12 per unit of volatility. If you would invest 607.00 in Klckner Co SE on September 2, 2024 and sell it today you would lose (143.00) from holding Klckner Co SE or give up 23.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMMERCIAL VEHICLE vs. Klckner Co SE
Performance |
| Timeline |
| COMMERCIAL VEHICLE |
| Klckner Co SE |
COMMERCIAL VEHICLE and Klöckner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMMERCIAL VEHICLE and Klöckner
The main advantage of trading using opposite COMMERCIAL VEHICLE and Klöckner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMMERCIAL VEHICLE position performs unexpectedly, Klöckner 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 Klöckner will offset losses from the drop in Klöckner's long position.| COMMERCIAL VEHICLE vs. National Retail Properties | COMMERCIAL VEHICLE vs. Tsingtao Brewery | COMMERCIAL VEHICLE vs. Caseys General Stores | COMMERCIAL VEHICLE vs. AEON STORES |
| Klöckner vs. AUST AGRICULTURAL | Klöckner vs. Granite Construction | Klöckner vs. Monster Beverage Corp | Klöckner vs. Australian Agricultural |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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