Correlation Between Glatfelter and BASF SE
Can any of the company-specific risk be diversified away by investing in both Glatfelter and BASF SE 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 Glatfelter and BASF SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glatfelter and BASF SE NA, you can compare the effects of market volatilities on Glatfelter and BASF SE 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 Glatfelter with a short position of BASF SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glatfelter and BASF SE.
Diversification Opportunities for Glatfelter and BASF SE
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Glatfelter and BASF is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Glatfelter and BASF SE NA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASF SE NA and Glatfelter 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 Glatfelter are associated (or correlated) with BASF SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASF SE NA has no effect on the direction of Glatfelter i.e., Glatfelter and BASF SE go up and down completely randomly.
Pair Corralation between Glatfelter and BASF SE
Considering the 90-day investment horizon Glatfelter is expected to under-perform the BASF SE. In addition to that, Glatfelter is 1.03 times more volatile than BASF SE NA. It trades about -1.01 of its total potential returns per unit of risk. BASF SE NA is currently generating about -0.19 per unit of volatility. If you would invest 4,959 in BASF SE NA on August 31, 2024 and sell it today you would lose (604.00) from holding BASF SE NA or give up 12.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 22.73% |
| Values | Daily Returns |
Glatfelter vs. BASF SE NA
Performance |
| Timeline |
| Glatfelter |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| BASF SE NA |
Glatfelter and BASF SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glatfelter and BASF SE
The main advantage of trading using opposite Glatfelter and BASF SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glatfelter position performs unexpectedly, BASF SE 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 BASF SE will offset losses from the drop in BASF SE's long position.| Glatfelter vs. Mercer International | Glatfelter vs. Sylvamo Corp | Glatfelter vs. Suzano Papel e | Glatfelter vs. UPM Kymmene Oyj |
| BASF SE vs. Shin Etsu Chemical Co | BASF SE vs. BASF SE ADR | BASF SE vs. Braskem SA Class | BASF SE vs. Celanese |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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