Correlation Between HomeToGo and ASSGENERALI ADR
Can any of the company-specific risk be diversified away by investing in both HomeToGo and ASSGENERALI ADR 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 HomeToGo and ASSGENERALI ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeToGo SE and ASSGENERALI ADR 12EO, you can compare the effects of market volatilities on HomeToGo and ASSGENERALI ADR 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 HomeToGo with a short position of ASSGENERALI ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeToGo and ASSGENERALI ADR.
Diversification Opportunities for HomeToGo and ASSGENERALI ADR
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HomeToGo and ASSGENERALI is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding HomeToGo SE and ASSGENERALI ADR 12EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSGENERALI ADR 12EO and HomeToGo 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 HomeToGo SE are associated (or correlated) with ASSGENERALI ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSGENERALI ADR 12EO has no effect on the direction of HomeToGo i.e., HomeToGo and ASSGENERALI ADR go up and down completely randomly.
Pair Corralation between HomeToGo and ASSGENERALI ADR
Assuming the 90 days trading horizon HomeToGo SE is expected to under-perform the ASSGENERALI ADR. In addition to that, HomeToGo is 1.87 times more volatile than ASSGENERALI ADR 12EO. It trades about -0.06 of its total potential returns per unit of risk. ASSGENERALI ADR 12EO is currently generating about 0.27 per unit of volatility. If you would invest 1,250 in ASSGENERALI ADR 12EO on September 1, 2024 and sell it today you would earn a total of 120.00 from holding ASSGENERALI ADR 12EO or generate 9.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
HomeToGo SE vs. ASSGENERALI ADR 12EO
Performance |
| Timeline |
| HomeToGo SE |
| ASSGENERALI ADR 12EO |
HomeToGo and ASSGENERALI ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeToGo and ASSGENERALI ADR
The main advantage of trading using opposite HomeToGo and ASSGENERALI ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeToGo position performs unexpectedly, ASSGENERALI ADR 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 ASSGENERALI ADR will offset losses from the drop in ASSGENERALI ADR's long position.| HomeToGo vs. Alphabet Class A | HomeToGo vs. Alphabet Class A | HomeToGo vs. Meta Platforms | HomeToGo vs. Tencent Holdings |
| ASSGENERALI ADR vs. NN Group NV | ASSGENERALI ADR vs. Superior Plus Corp | ASSGENERALI ADR vs. Origin Agritech | ASSGENERALI ADR vs. Identiv |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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