Correlation Between Nordex SE and IDEX
Can any of the company-specific risk be diversified away by investing in both Nordex SE and IDEX 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 Nordex SE and IDEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordex SE and IDEX Corporation, you can compare the effects of market volatilities on Nordex SE and IDEX 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 Nordex SE with a short position of IDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordex SE and IDEX.
Diversification Opportunities for Nordex SE and IDEX
Very good diversification
The 3 months correlation between Nordex and IDEX is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Nordex SE and IDEX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEX and Nordex SE 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 Nordex SE are associated (or correlated) with IDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEX has no effect on the direction of Nordex SE i.e., Nordex SE and IDEX go up and down completely randomly.
Pair Corralation between Nordex SE and IDEX
Assuming the 90 days horizon Nordex SE is expected to under-perform the IDEX. In addition to that, Nordex SE is 2.3 times more volatile than IDEX Corporation. It trades about 0.0 of its total potential returns per unit of risk. IDEX Corporation is currently generating about 0.06 per unit of volatility. If you would invest 20,983 in IDEX Corporation on August 25, 2024 and sell it today you would earn a total of 2,267 from holding IDEX Corporation or generate 10.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Nordex SE vs. IDEX Corp.
Performance |
| Timeline |
| Nordex SE |
| IDEX |
Nordex SE and IDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordex SE and IDEX
The main advantage of trading using opposite Nordex SE and IDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordex SE position performs unexpectedly, IDEX 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 IDEX will offset losses from the drop in IDEX's long position.| Nordex SE vs. Atlas Copco AB | Nordex SE vs. Atlas Copco ADR | Nordex SE vs. Siemens AG Class | Nordex SE vs. Sandvik AB ADR |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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