Correlation Between Caltagirone SpA and Salzgitter
Can any of the company-specific risk be diversified away by investing in both Caltagirone SpA and Salzgitter 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 Caltagirone SpA and Salzgitter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caltagirone SpA and Salzgitter AG, you can compare the effects of market volatilities on Caltagirone SpA and Salzgitter 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 Caltagirone SpA with a short position of Salzgitter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caltagirone SpA and Salzgitter.
Diversification Opportunities for Caltagirone SpA and Salzgitter
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Caltagirone and Salzgitter is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Caltagirone SpA and Salzgitter AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salzgitter AG and Caltagirone SpA 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 Caltagirone SpA are associated (or correlated) with Salzgitter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salzgitter AG has no effect on the direction of Caltagirone SpA i.e., Caltagirone SpA and Salzgitter go up and down completely randomly.
Pair Corralation between Caltagirone SpA and Salzgitter
Assuming the 90 days trading horizon Caltagirone SpA is expected to generate 2.02 times more return on investment than Salzgitter. However, Caltagirone SpA is 2.02 times more volatile than Salzgitter AG. It trades about 0.06 of its potential returns per unit of risk. Salzgitter AG is currently generating about -0.13 per unit of risk. If you would invest 584.00 in Caltagirone SpA on September 12, 2024 and sell it today you would earn a total of 24.00 from holding Caltagirone SpA or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caltagirone SpA vs. Salzgitter AG
Performance |
| Timeline |
| Caltagirone SpA |
| Salzgitter AG |
Caltagirone SpA and Salzgitter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caltagirone SpA and Salzgitter
The main advantage of trading using opposite Caltagirone SpA and Salzgitter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caltagirone SpA position performs unexpectedly, Salzgitter 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 Salzgitter will offset losses from the drop in Salzgitter's long position.| Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc |
| Salzgitter vs. HomeToGo SE | Salzgitter vs. Caltagirone SpA | Salzgitter vs. MI Homes | Salzgitter vs. CENTURIA OFFICE REIT |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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