Correlation Between Mercedes Benz and 2G ENERGY
Can any of the company-specific risk be diversified away by investing in both Mercedes Benz and 2G ENERGY 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 Mercedes Benz and 2G ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercedes Benz Group AG and 2G ENERGY , you can compare the effects of market volatilities on Mercedes Benz and 2G ENERGY 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 Mercedes Benz with a short position of 2G ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercedes Benz and 2G ENERGY.
Diversification Opportunities for Mercedes Benz and 2G ENERGY
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mercedes and 2GB is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Mercedes Benz Group AG and 2G ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2G ENERGY and Mercedes Benz 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 Mercedes Benz Group AG are associated (or correlated) with 2G ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2G ENERGY has no effect on the direction of Mercedes Benz i.e., Mercedes Benz and 2G ENERGY go up and down completely randomly.
Pair Corralation between Mercedes Benz and 2G ENERGY
Assuming the 90 days horizon Mercedes Benz Group AG is expected to under-perform the 2G ENERGY. But the stock apears to be less risky and, when comparing its historical volatility, Mercedes Benz Group AG is 1.64 times less risky than 2G ENERGY. The stock trades about -0.03 of its potential returns per unit of risk. The 2G ENERGY is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,568 in 2G ENERGY on August 29, 2024 and sell it today you would lose (398.00) from holding 2G ENERGY or give up 15.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercedes Benz Group AG vs. 2G ENERGY
Performance |
| Timeline |
| Mercedes Benz Group |
| 2G ENERGY |
Mercedes Benz and 2G ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercedes Benz and 2G ENERGY
The main advantage of trading using opposite Mercedes Benz and 2G ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercedes Benz position performs unexpectedly, 2G ENERGY 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 2G ENERGY will offset losses from the drop in 2G ENERGY's long position.| Mercedes Benz vs. Global Ship Lease | Mercedes Benz vs. ALBIS LEASING AG | Mercedes Benz vs. Consolidated Communications Holdings | Mercedes Benz vs. GOODYEAR T RUBBER |
| 2G ENERGY vs. FISH PAYK HEALTH | 2G ENERGY vs. GREENX METALS LTD | 2G ENERGY vs. Lion One Metals | 2G ENERGY vs. Zijin Mining Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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