Correlation Between Nutex Investments and BASF SE
Can any of the company-specific risk be diversified away by investing in both Nutex Investments and BASF SE 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 Nutex Investments and BASF SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nutex Investments PLC and BASF SE, you can compare the effects of market volatilities on Nutex Investments and BASF SE 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 Nutex Investments with a short position of BASF SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nutex Investments and BASF SE.
Diversification Opportunities for Nutex Investments and BASF SE
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nutex and BASF is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Nutex Investments PLC and BASF SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASF SE and Nutex Investments 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 Nutex Investments PLC are associated (or correlated) with BASF SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASF SE has no effect on the direction of Nutex Investments i.e., Nutex Investments and BASF SE go up and down completely randomly.
Pair Corralation between Nutex Investments and BASF SE
Assuming the 90 days trading horizon Nutex Investments PLC is expected to generate 1.59 times more return on investment than BASF SE. However, Nutex Investments is 1.59 times more volatile than BASF SE. It trades about 0.06 of its potential returns per unit of risk. BASF SE is currently generating about 0.04 per unit of risk. If you would invest 1,390 in Nutex Investments PLC on September 12, 2024 and sell it today you would earn a total of 1,300 from holding Nutex Investments PLC or generate 93.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 52.23% |
| Values | Daily Returns |
Nutex Investments PLC vs. BASF SE
Performance |
| Timeline |
| Nutex Investments PLC |
| BASF SE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Nutex Investments and BASF SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nutex Investments and BASF SE
The main advantage of trading using opposite Nutex Investments and BASF SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nutex Investments position performs unexpectedly, BASF SE 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 BASF SE will offset losses from the drop in BASF SE's long position.| Nutex Investments vs. NordTelekom Telecommunications Service | Nutex Investments vs. AKKO Invest Nyrt | Nutex Investments vs. Raba Jarmuipari Holding | Nutex Investments vs. AutoWallis Nyrt |
| BASF SE vs. NordTelekom Telecommunications Service | BASF SE vs. Deutsche Bank AG | BASF SE vs. OTP Bank Nyrt | BASF SE vs. Delta Technologies Nyrt |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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