Correlation Between Commercial Vehicle and HAPAG LLOYD
Can any of the company-specific risk be diversified away by investing in both Commercial Vehicle and HAPAG LLOYD 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 HAPAG LLOYD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Vehicle Group and HAPAG LLOYD UNSPADR 12, you can compare the effects of market volatilities on Commercial Vehicle and HAPAG LLOYD 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 HAPAG LLOYD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and HAPAG LLOYD.
Diversification Opportunities for Commercial Vehicle and HAPAG LLOYD
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commercial and HAPAG is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and HAPAG LLOYD UNSPADR 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAPAG LLOYD UNSPADR 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 Group are associated (or correlated) with HAPAG LLOYD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAPAG LLOYD UNSPADR has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and HAPAG LLOYD go up and down completely randomly.
Pair Corralation between Commercial Vehicle and HAPAG LLOYD
Assuming the 90 days trading horizon Commercial Vehicle Group is expected to under-perform the HAPAG LLOYD. But the stock apears to be less risky and, when comparing its historical volatility, Commercial Vehicle Group is 1.47 times less risky than HAPAG LLOYD. The stock trades about -0.05 of its potential returns per unit of risk. The HAPAG LLOYD UNSPADR 12 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6,647 in HAPAG LLOYD UNSPADR 12 on September 12, 2024 and sell it today you would earn a total of 1,103 from holding HAPAG LLOYD UNSPADR 12 or generate 16.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial Vehicle Group vs. HAPAG LLOYD UNSPADR 12
Performance |
| Timeline |
| Commercial Vehicle |
| HAPAG LLOYD UNSPADR |
Commercial Vehicle and HAPAG LLOYD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Vehicle and HAPAG LLOYD
The main advantage of trading using opposite Commercial Vehicle and HAPAG LLOYD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Vehicle position performs unexpectedly, HAPAG LLOYD 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 HAPAG LLOYD will offset losses from the drop in HAPAG LLOYD's long position.| Commercial Vehicle vs. Reinsurance Group of | Commercial Vehicle vs. SOLSTAD OFFSHORE NK | Commercial Vehicle vs. SBI Insurance Group | Commercial Vehicle vs. SBM OFFSHORE |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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