Correlation Between Genworth Financial and BASF SE
Can any of the company-specific risk be diversified away by investing in both Genworth Financial 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 Genworth Financial and BASF SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genworth Financial and BASF SE, you can compare the effects of market volatilities on Genworth Financial 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 Genworth Financial with a short position of BASF SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genworth Financial and BASF SE.
Diversification Opportunities for Genworth Financial and BASF SE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Genworth and BASF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Genworth Financial and BASF SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASF SE and Genworth Financial 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 Genworth Financial 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 has no effect on the direction of Genworth Financial i.e., Genworth Financial and BASF SE go up and down completely randomly.
Pair Corralation between Genworth Financial and BASF SE
If you would invest 84,200 in BASF SE on September 2, 2024 and sell it today you would earn a total of 0.00 from holding BASF SE or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genworth Financial vs. BASF SE
Performance |
| Timeline |
| Genworth Financial |
| BASF SE |
Genworth Financial and BASF SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genworth Financial and BASF SE
The main advantage of trading using opposite Genworth Financial and BASF SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genworth Financial 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.| Genworth Financial vs. First Majestic Silver | Genworth Financial vs. Verizon Communications | Genworth Financial vs. Deutsche Bank Aktiengesellschaft | Genworth Financial vs. DXC Technology |
| BASF SE vs. Prudential Financial | BASF SE vs. Southern Copper | BASF SE vs. Micron Technology | BASF SE vs. Grupo Sports World |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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