Correlation Between 3M and Berli Jucker
Can any of the company-specific risk be diversified away by investing in both 3M and Berli Jucker 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 3M and Berli Jucker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3M Company and Berli Jucker PCL, you can compare the effects of market volatilities on 3M and Berli Jucker 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 3M with a short position of Berli Jucker. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and Berli Jucker.
Diversification Opportunities for 3M and Berli Jucker
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 3M and Berli is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and Berli Jucker PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berli Jucker PCL and 3M 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 3M Company are associated (or correlated) with Berli Jucker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berli Jucker PCL has no effect on the direction of 3M i.e., 3M and Berli Jucker go up and down completely randomly.
Pair Corralation between 3M and Berli Jucker
Considering the 90-day investment horizon 3M Company is expected to generate 1.17 times more return on investment than Berli Jucker. However, 3M is 1.17 times more volatile than Berli Jucker PCL. It trades about 0.04 of its potential returns per unit of risk. Berli Jucker PCL is currently generating about -0.04 per unit of risk. If you would invest 9,188 in 3M Company on September 19, 2024 and sell it today you would earn a total of 3,617 from holding 3M Company or generate 39.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 84.04% |
| Values | Daily Returns |
3M Company vs. Berli Jucker PCL
Performance |
| Timeline |
| 3M Company |
| Berli Jucker PCL |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
3M and Berli Jucker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and Berli Jucker
The main advantage of trading using opposite 3M and Berli Jucker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, Berli Jucker 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 Berli Jucker will offset losses from the drop in Berli Jucker's long position.| 3M vs. Vast Renewables Limited | 3M vs. 1847 Holdings LLC | 3M vs. Westport Fuel Systems | 3M vs. Brookfield Business Partners |
| Berli Jucker vs. Teijin | Berli Jucker vs. Ayala Corp ADR | Berli Jucker vs. CK Hutchison Holdings | Berli Jucker vs. 1847 Holdings LLC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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