Correlation Between HORNBACH Baumarkt and WICKES GROUP
Can any of the company-specific risk be diversified away by investing in both HORNBACH Baumarkt and WICKES GROUP 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 HORNBACH Baumarkt and WICKES GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HORNBACH Baumarkt AG and WICKES GROUP PLC, you can compare the effects of market volatilities on HORNBACH Baumarkt and WICKES GROUP 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 HORNBACH Baumarkt with a short position of WICKES GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of HORNBACH Baumarkt and WICKES GROUP.
Diversification Opportunities for HORNBACH Baumarkt and WICKES GROUP
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HORNBACH and WICKES is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding HORNBACH Baumarkt AG and WICKES GROUP PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WICKES GROUP PLC and HORNBACH Baumarkt 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 HORNBACH Baumarkt AG are associated (or correlated) with WICKES GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WICKES GROUP PLC has no effect on the direction of HORNBACH Baumarkt i.e., HORNBACH Baumarkt and WICKES GROUP go up and down completely randomly.
Pair Corralation between HORNBACH Baumarkt and WICKES GROUP
Assuming the 90 days trading horizon HORNBACH Baumarkt AG is expected to generate 1.69 times more return on investment than WICKES GROUP. However, HORNBACH Baumarkt is 1.69 times more volatile than WICKES GROUP PLC. It trades about -0.01 of its potential returns per unit of risk. WICKES GROUP PLC is currently generating about -0.29 per unit of risk. If you would invest 6,000 in HORNBACH Baumarkt AG on September 1, 2024 and sell it today you would lose (50.00) from holding HORNBACH Baumarkt AG or give up 0.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
HORNBACH Baumarkt AG vs. WICKES GROUP PLC
Performance |
| Timeline |
| HORNBACH Baumarkt |
| WICKES GROUP PLC |
HORNBACH Baumarkt and WICKES GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HORNBACH Baumarkt and WICKES GROUP
The main advantage of trading using opposite HORNBACH Baumarkt and WICKES GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HORNBACH Baumarkt position performs unexpectedly, WICKES GROUP 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 WICKES GROUP will offset losses from the drop in WICKES GROUP's long position.| HORNBACH Baumarkt vs. Laureate Education | HORNBACH Baumarkt vs. Jacquet Metal Service | HORNBACH Baumarkt vs. TAL Education Group | HORNBACH Baumarkt vs. ATRYS HEALTH SA |
| WICKES GROUP vs. CapitaLand Investment Limited | WICKES GROUP vs. PennyMac Mortgage Investment | WICKES GROUP vs. Jacquet Metal Service | WICKES GROUP vs. LION ONE METALS |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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