Correlation Between VERBUND AG and CHUGOKU EL
Can any of the company-specific risk be diversified away by investing in both VERBUND AG and CHUGOKU EL 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 VERBUND AG and CHUGOKU EL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VERBUND AG ADR and CHUGOKU EL PWR, you can compare the effects of market volatilities on VERBUND AG and CHUGOKU EL 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 VERBUND AG with a short position of CHUGOKU EL. Check out your portfolio center. Please also check ongoing floating volatility patterns of VERBUND AG and CHUGOKU EL.
Diversification Opportunities for VERBUND AG and CHUGOKU EL
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between VERBUND and CHUGOKU is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding VERBUND AG ADR and CHUGOKU EL PWR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHUGOKU EL PWR and VERBUND AG 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 VERBUND AG ADR are associated (or correlated) with CHUGOKU EL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHUGOKU EL PWR has no effect on the direction of VERBUND AG i.e., VERBUND AG and CHUGOKU EL go up and down completely randomly.
Pair Corralation between VERBUND AG and CHUGOKU EL
Assuming the 90 days horizon VERBUND AG ADR is expected to generate 0.66 times more return on investment than CHUGOKU EL. However, VERBUND AG ADR is 1.52 times less risky than CHUGOKU EL. It trades about 0.04 of its potential returns per unit of risk. CHUGOKU EL PWR is currently generating about -0.27 per unit of risk. If you would invest 1,410 in VERBUND AG ADR on September 12, 2024 and sell it today you would earn a total of 20.00 from holding VERBUND AG ADR or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
VERBUND AG ADR vs. CHUGOKU EL PWR
Performance |
| Timeline |
| VERBUND AG ADR |
| CHUGOKU EL PWR |
VERBUND AG and CHUGOKU EL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VERBUND AG and CHUGOKU EL
The main advantage of trading using opposite VERBUND AG and CHUGOKU EL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VERBUND AG position performs unexpectedly, CHUGOKU EL 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 CHUGOKU EL will offset losses from the drop in CHUGOKU EL's long position.| VERBUND AG vs. HK Electric Investments | VERBUND AG vs. MSAD INSURANCE | VERBUND AG vs. The Hanover Insurance | VERBUND AG vs. Singapore Reinsurance |
| CHUGOKU EL vs. VERBUND AG ADR | CHUGOKU EL vs. TOHOKU EL PWR | CHUGOKU EL vs. BEIJJINGNENG CLERGHYC1 | CHUGOKU EL vs. EnviTec Biogas AG |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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