Correlation Between HEIA and Bayer Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both HEIA and Bayer Aktiengesellscha 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 HEIA and Bayer Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEIA and Bayer Aktiengesellschaft, you can compare the effects of market volatilities on HEIA and Bayer Aktiengesellscha 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 HEIA with a short position of Bayer Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEIA and Bayer Aktiengesellscha.
Diversification Opportunities for HEIA and Bayer Aktiengesellscha
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HEIA and Bayer is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding HEIA and Bayer Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer Aktiengesellschaft and HEIA 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 HEIA are associated (or correlated) with Bayer Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer Aktiengesellschaft has no effect on the direction of HEIA i.e., HEIA and Bayer Aktiengesellscha go up and down completely randomly.
Pair Corralation between HEIA and Bayer Aktiengesellscha
Given the investment horizon of 90 days HEIA is expected to generate 0.29 times more return on investment than Bayer Aktiengesellscha. However, HEIA is 3.43 times less risky than Bayer Aktiengesellscha. It trades about 0.17 of its potential returns per unit of risk. Bayer Aktiengesellschaft is currently generating about -0.02 per unit of risk. If you would invest 14,483 in HEIA on August 29, 2024 and sell it today you would earn a total of 5,639 from holding HEIA or generate 38.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 75.83% |
| Values | Daily Returns |
HEIA vs. Bayer Aktiengesellschaft
Performance |
| Timeline |
| HEIA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bayer Aktiengesellschaft |
HEIA and Bayer Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEIA and Bayer Aktiengesellscha
The main advantage of trading using opposite HEIA and Bayer Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEIA position performs unexpectedly, Bayer Aktiengesellscha 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 Bayer Aktiengesellscha will offset losses from the drop in Bayer Aktiengesellscha's long position.| HEIA vs. Merit Medical Systems | HEIA vs. Apollo Medical Holdings | HEIA vs. MEDICAL FACILITIES NEW | HEIA vs. SBM OFFSHORE |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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