Correlation Between INTERSHOP Communications and JERONIMO MARTINS
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By analyzing existing cross correlation between INTERSHOP Communications Aktiengesellschaft and JERONIMO MARTINS UNADR2, you can compare the effects of market volatilities on INTERSHOP Communications and JERONIMO MARTINS 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 INTERSHOP Communications with a short position of JERONIMO MARTINS. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERSHOP Communications and JERONIMO MARTINS.
Diversification Opportunities for INTERSHOP Communications and JERONIMO MARTINS
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INTERSHOP and JERONIMO is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding INTERSHOP Communications Aktie and JERONIMO MARTINS UNADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JERONIMO MARTINS UNADR2 and INTERSHOP Communications 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 INTERSHOP Communications Aktiengesellschaft are associated (or correlated) with JERONIMO MARTINS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JERONIMO MARTINS UNADR2 has no effect on the direction of INTERSHOP Communications i.e., INTERSHOP Communications and JERONIMO MARTINS go up and down completely randomly.
Pair Corralation between INTERSHOP Communications and JERONIMO MARTINS
Assuming the 90 days trading horizon INTERSHOP Communications Aktiengesellschaft is expected to generate 2.08 times more return on investment than JERONIMO MARTINS. However, INTERSHOP Communications is 2.08 times more volatile than JERONIMO MARTINS UNADR2. It trades about 0.08 of its potential returns per unit of risk. JERONIMO MARTINS UNADR2 is currently generating about 0.1 per unit of risk. If you would invest 179.00 in INTERSHOP Communications Aktiengesellschaft on December 11, 2024 and sell it today you would earn a total of 20.00 from holding INTERSHOP Communications Aktiengesellschaft or generate 11.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERSHOP Communications Aktie vs. JERONIMO MARTINS UNADR2
Performance |
| Timeline |
| INTERSHOP Communications |
| JERONIMO MARTINS UNADR2 |
INTERSHOP Communications and JERONIMO MARTINS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERSHOP Communications and JERONIMO MARTINS
The main advantage of trading using opposite INTERSHOP Communications and JERONIMO MARTINS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERSHOP Communications position performs unexpectedly, JERONIMO MARTINS 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 JERONIMO MARTINS will offset losses from the drop in JERONIMO MARTINS's long position.The idea behind INTERSHOP Communications Aktiengesellschaft and JERONIMO MARTINS UNADR2 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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