Correlation Between PICKN PAY and HORNBACH Baumarkt
Can any of the company-specific risk be diversified away by investing in both PICKN PAY and HORNBACH Baumarkt 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 PICKN PAY and HORNBACH Baumarkt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PICKN PAY STORES and HORNBACH Baumarkt AG, you can compare the effects of market volatilities on PICKN PAY and HORNBACH Baumarkt 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 PICKN PAY with a short position of HORNBACH Baumarkt. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and HORNBACH Baumarkt.
Diversification Opportunities for PICKN PAY and HORNBACH Baumarkt
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PICKN and HORNBACH is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and HORNBACH Baumarkt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HORNBACH Baumarkt and PICKN PAY 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 PICKN PAY STORES are associated (or correlated) with HORNBACH Baumarkt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HORNBACH Baumarkt has no effect on the direction of PICKN PAY i.e., PICKN PAY and HORNBACH Baumarkt go up and down completely randomly.
Pair Corralation between PICKN PAY and HORNBACH Baumarkt
Assuming the 90 days trading horizon PICKN PAY STORES is expected to generate 2.28 times more return on investment than HORNBACH Baumarkt. However, PICKN PAY is 2.28 times more volatile than HORNBACH Baumarkt AG. It trades about 0.08 of its potential returns per unit of risk. HORNBACH Baumarkt AG is currently generating about 0.09 per unit of risk. If you would invest 82.00 in PICKN PAY STORES on December 4, 2024 and sell it today you would earn a total of 55.00 from holding PICKN PAY STORES or generate 67.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PICKN PAY STORES vs. HORNBACH Baumarkt AG
Performance |
| Timeline |
| PICKN PAY STORES |
| HORNBACH Baumarkt |
PICKN PAY and HORNBACH Baumarkt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICKN PAY and HORNBACH Baumarkt
The main advantage of trading using opposite PICKN PAY and HORNBACH Baumarkt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY position performs unexpectedly, HORNBACH Baumarkt 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 HORNBACH Baumarkt will offset losses from the drop in HORNBACH Baumarkt's long position.| PICKN PAY vs. GEELY AUTOMOBILE | PICKN PAY vs. Check Point Software | PICKN PAY vs. Motorcar Parts of | PICKN PAY vs. X FAB Silicon Foundries |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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