Correlation Between ITALIAN WINE and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE and Thyssenkrupp 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 ITALIAN WINE and Thyssenkrupp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITALIAN WINE BRANDS and thyssenkrupp AG, you can compare the effects of market volatilities on ITALIAN WINE and Thyssenkrupp 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 ITALIAN WINE with a short position of Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and Thyssenkrupp.
Diversification Opportunities for ITALIAN WINE and Thyssenkrupp
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ITALIAN and Thyssenkrupp is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG and ITALIAN WINE 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 ITALIAN WINE BRANDS are associated (or correlated) with Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of ITALIAN WINE i.e., ITALIAN WINE and Thyssenkrupp go up and down completely randomly.
Pair Corralation between ITALIAN WINE and Thyssenkrupp
Assuming the 90 days horizon ITALIAN WINE BRANDS is expected to under-perform the Thyssenkrupp. But the stock apears to be less risky and, when comparing its historical volatility, ITALIAN WINE BRANDS is 2.37 times less risky than Thyssenkrupp. The stock trades about -0.02 of its potential returns per unit of risk. The thyssenkrupp AG is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 323.00 in thyssenkrupp AG on September 5, 2024 and sell it today you would earn a total of 68.00 from holding thyssenkrupp AG or generate 21.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITALIAN WINE BRANDS vs. thyssenkrupp AG
Performance |
| Timeline |
| ITALIAN WINE BRANDS |
| thyssenkrupp AG |
ITALIAN WINE and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITALIAN WINE and Thyssenkrupp
The main advantage of trading using opposite ITALIAN WINE and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.| ITALIAN WINE vs. CHINA TONTINE WINES | ITALIAN WINE vs. Superior Plus Corp | ITALIAN WINE vs. NMI Holdings | ITALIAN WINE vs. Origin Agritech |
| Thyssenkrupp vs. MELIA HOTELS | Thyssenkrupp vs. Luckin Coffee | Thyssenkrupp vs. ITALIAN WINE BRANDS | Thyssenkrupp vs. InterContinental Hotels 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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