Correlation Between STRA Hannoversche and MUTUIONLINE
Can any of the company-specific risk be diversified away by investing in both STRA Hannoversche and MUTUIONLINE 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 STRA Hannoversche and MUTUIONLINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRA Hannoversche Verkehrsbetriebe and MUTUIONLINE, you can compare the effects of market volatilities on STRA Hannoversche and MUTUIONLINE 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 STRA Hannoversche with a short position of MUTUIONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRA Hannoversche and MUTUIONLINE.
Diversification Opportunities for STRA Hannoversche and MUTUIONLINE
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between STRA and MUTUIONLINE is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding STRA Hannoversche Verkehrsbetr and MUTUIONLINE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MUTUIONLINE and STRA Hannoversche 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 STRA Hannoversche Verkehrsbetriebe are associated (or correlated) with MUTUIONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MUTUIONLINE has no effect on the direction of STRA Hannoversche i.e., STRA Hannoversche and MUTUIONLINE go up and down completely randomly.
Pair Corralation between STRA Hannoversche and MUTUIONLINE
Assuming the 90 days horizon STRA Hannoversche Verkehrsbetriebe is expected to under-perform the MUTUIONLINE. But the stock apears to be less risky and, when comparing its historical volatility, STRA Hannoversche Verkehrsbetriebe is 3.33 times less risky than MUTUIONLINE. The stock trades about -0.21 of its potential returns per unit of risk. The MUTUIONLINE is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,485 in MUTUIONLINE on September 12, 2024 and sell it today you would earn a total of 240.00 from holding MUTUIONLINE or generate 6.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRA Hannoversche Verkehrsbetr vs. MUTUIONLINE
Performance |
| Timeline |
| STRA Hannoversche |
| MUTUIONLINE |
STRA Hannoversche and MUTUIONLINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRA Hannoversche and MUTUIONLINE
The main advantage of trading using opposite STRA Hannoversche and MUTUIONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRA Hannoversche position performs unexpectedly, MUTUIONLINE 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 MUTUIONLINE will offset losses from the drop in MUTUIONLINE's long position.| STRA Hannoversche vs. MUTUIONLINE | STRA Hannoversche vs. ON SEMICONDUCTOR | STRA Hannoversche vs. NXP Semiconductors NV | STRA Hannoversche vs. TOREX SEMICONDUCTOR LTD |
| MUTUIONLINE vs. Apple Inc | MUTUIONLINE vs. Apple Inc | MUTUIONLINE vs. Apple Inc | MUTUIONLINE vs. Apple Inc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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