Correlation Between PICKN PAY and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both PICKN PAY and Thyssenkrupp 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 Thyssenkrupp 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 thyssenkrupp AG, you can compare the effects of market volatilities on PICKN PAY and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and Thyssenkrupp.
Diversification Opportunities for PICKN PAY and Thyssenkrupp
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PICKN and Thyssenkrupp is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of PICKN PAY i.e., PICKN PAY and Thyssenkrupp go up and down completely randomly.
Pair Corralation between PICKN PAY and Thyssenkrupp
Assuming the 90 days trading horizon PICKN PAY is expected to generate 16.22 times less return on investment than Thyssenkrupp. In addition to that, PICKN PAY is 1.17 times more volatile than thyssenkrupp AG. It trades about 0.01 of its total potential returns per unit of risk. thyssenkrupp AG is currently generating about 0.21 per unit of volatility. If you would invest 388.00 in thyssenkrupp AG on October 24, 2024 and sell it today you would earn a total of 29.00 from holding thyssenkrupp AG or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
PICKN PAY STORES vs. thyssenkrupp AG
Performance |
| Timeline |
| PICKN PAY STORES |
| thyssenkrupp AG |
PICKN PAY and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICKN PAY and Thyssenkrupp
The main advantage of trading using opposite PICKN PAY and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.| PICKN PAY vs. ALEFARM BREWING DK 05 | PICKN PAY vs. CARSALESCOM | PICKN PAY vs. Granite Construction | PICKN PAY vs. Gruppo Mutuionline SpA |
| Thyssenkrupp vs. AEON STORES | Thyssenkrupp vs. Sun Life Financial | Thyssenkrupp vs. SUN LIFE FINANCIAL | Thyssenkrupp vs. PICKN PAY STORES |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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