Correlation Between Mueller Industries and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both Mueller Industries 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 Mueller Industries and Thyssenkrupp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mueller Industries and thyssenkrupp AG, you can compare the effects of market volatilities on Mueller Industries 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 Mueller Industries with a short position of Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mueller Industries and Thyssenkrupp.
Diversification Opportunities for Mueller Industries and Thyssenkrupp
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mueller and Thyssenkrupp is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mueller Industries and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG and Mueller Industries 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 Mueller Industries 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 Mueller Industries i.e., Mueller Industries and Thyssenkrupp go up and down completely randomly.
Pair Corralation between Mueller Industries and Thyssenkrupp
Assuming the 90 days horizon Mueller Industries is expected to under-perform the Thyssenkrupp. But the stock apears to be less risky and, when comparing its historical volatility, Mueller Industries is 2.98 times less risky than Thyssenkrupp. The stock trades about -0.04 of its potential returns per unit of risk. The thyssenkrupp AG is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 438.00 in thyssenkrupp AG on December 6, 2024 and sell it today you would earn a total of 477.00 from holding thyssenkrupp AG or generate 108.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mueller Industries vs. thyssenkrupp AG
Performance |
| Timeline |
| Mueller Industries |
| thyssenkrupp AG |
Mueller Industries and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mueller Industries and Thyssenkrupp
The main advantage of trading using opposite Mueller Industries and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mueller Industries 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.| Mueller Industries vs. CHINA TELECOM H | Mueller Industries vs. Ribbon Communications | Mueller Industries vs. Grupo Carso SAB | Mueller Industries vs. Singapore Telecommunications Limited |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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