Correlation Between NetEase and CureVac NV
Can any of the company-specific risk be diversified away by investing in both NetEase and CureVac NV 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 NetEase and CureVac NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NetEase and CureVac NV, you can compare the effects of market volatilities on NetEase and CureVac NV 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 NetEase with a short position of CureVac NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of NetEase and CureVac NV.
Diversification Opportunities for NetEase and CureVac NV
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NetEase and CureVac is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding NetEase and CureVac NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CureVac NV and NetEase 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 NetEase are associated (or correlated) with CureVac NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CureVac NV has no effect on the direction of NetEase i.e., NetEase and CureVac NV go up and down completely randomly.
Pair Corralation between NetEase and CureVac NV
Given the investment horizon of 90 days NetEase is expected to generate 1.98 times less return on investment than CureVac NV. But when comparing it to its historical volatility, NetEase is 2.01 times less risky than CureVac NV. It trades about 0.16 of its potential returns per unit of risk. CureVac NV is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 287.00 in CureVac NV on October 30, 2024 and sell it today you would earn a total of 91.00 from holding CureVac NV or generate 31.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NetEase vs. CureVac NV
Performance |
| Timeline |
| NetEase |
| CureVac NV |
NetEase and CureVac NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NetEase and CureVac NV
The main advantage of trading using opposite NetEase and CureVac NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NetEase position performs unexpectedly, CureVac NV 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 CureVac NV will offset losses from the drop in CureVac NV's long position.| NetEase vs. Electronic Arts | NetEase vs. Doubledown Interactive Co | NetEase vs. GD Culture Group | NetEase vs. GameSquare Holdings |
| CureVac NV vs. Cimpress NV | CureVac NV vs. Arq Inc | CureVac NV vs. Park Electrochemical | CureVac NV vs. The Mosaic |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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