Correlation Between Commercial Vehicle and Glaston Oyj
Can any of the company-specific risk be diversified away by investing in both Commercial Vehicle and Glaston Oyj 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 Glaston Oyj 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 Glaston Oyj Abp, you can compare the effects of market volatilities on Commercial Vehicle and Glaston Oyj 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 Glaston Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and Glaston Oyj.
Diversification Opportunities for Commercial Vehicle and Glaston Oyj
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Commercial and Glaston is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and Glaston Oyj Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glaston Oyj Abp 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 Glaston Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glaston Oyj Abp has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and Glaston Oyj go up and down completely randomly.
Pair Corralation between Commercial Vehicle and Glaston Oyj
Assuming the 90 days trading horizon Commercial Vehicle Group is expected to under-perform the Glaston Oyj. In addition to that, Commercial Vehicle is 1.31 times more volatile than Glaston Oyj Abp. It trades about -0.17 of its total potential returns per unit of risk. Glaston Oyj Abp is currently generating about -0.03 per unit of volatility. If you would invest 76.00 in Glaston Oyj Abp on September 13, 2024 and sell it today you would lose (4.00) from holding Glaston Oyj Abp or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Commercial Vehicle Group vs. Glaston Oyj Abp
Performance |
| Timeline |
| Commercial Vehicle |
| Glaston Oyj Abp |
Commercial Vehicle and Glaston Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Vehicle and Glaston Oyj
The main advantage of trading using opposite Commercial Vehicle and Glaston Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Vehicle position performs unexpectedly, Glaston Oyj 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 Glaston Oyj will offset losses from the drop in Glaston Oyj's long position.| Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc |
| Glaston Oyj vs. Grupo Carso SAB | Glaston Oyj vs. AUTO TRADER ADR | Glaston Oyj vs. Commercial Vehicle Group | Glaston Oyj vs. Salesforce |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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