Correlation Between Fuchs Petrolub and HEXPOL AB
Can any of the company-specific risk be diversified away by investing in both Fuchs Petrolub and HEXPOL AB 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 Fuchs Petrolub and HEXPOL AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuchs Petrolub SE and HEXPOL AB, you can compare the effects of market volatilities on Fuchs Petrolub and HEXPOL AB 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 Fuchs Petrolub with a short position of HEXPOL AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuchs Petrolub and HEXPOL AB.
Diversification Opportunities for Fuchs Petrolub and HEXPOL AB
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fuchs and HEXPOL is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Fuchs Petrolub SE and HEXPOL AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEXPOL AB and Fuchs Petrolub 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 Fuchs Petrolub SE are associated (or correlated) with HEXPOL AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEXPOL AB has no effect on the direction of Fuchs Petrolub i.e., Fuchs Petrolub and HEXPOL AB go up and down completely randomly.
Pair Corralation between Fuchs Petrolub and HEXPOL AB
Assuming the 90 days horizon Fuchs Petrolub SE is expected to generate 0.65 times more return on investment than HEXPOL AB. However, Fuchs Petrolub SE is 1.55 times less risky than HEXPOL AB. It trades about 0.05 of its potential returns per unit of risk. HEXPOL AB is currently generating about -0.01 per unit of risk. If you would invest 851.00 in Fuchs Petrolub SE on August 27, 2024 and sell it today you would earn a total of 292.00 from holding Fuchs Petrolub SE or generate 34.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 78.23% |
| Values | Daily Returns |
Fuchs Petrolub SE vs. HEXPOL AB
Performance |
| Timeline |
| Fuchs Petrolub SE |
| HEXPOL AB |
Fuchs Petrolub and HEXPOL AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuchs Petrolub and HEXPOL AB
The main advantage of trading using opposite Fuchs Petrolub and HEXPOL AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuchs Petrolub position performs unexpectedly, HEXPOL AB 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 HEXPOL AB will offset losses from the drop in HEXPOL AB's long position.| Fuchs Petrolub vs. First Graphene | Fuchs Petrolub vs. HUMANA INC | Fuchs Petrolub vs. Aquagold International | Fuchs Petrolub vs. Barloworld Ltd ADR |
| HEXPOL AB vs. Lanxess AG | HEXPOL AB vs. Incitec Pivot Ltd | HEXPOL AB vs. Fuchs Petrolub SE | HEXPOL AB vs. Croda International PLC |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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