Correlation Between Ferrari NV and Azure Holding
Can any of the company-specific risk be diversified away by investing in both Ferrari NV and Azure Holding 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 Ferrari NV and Azure Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrari NV and Azure Holding Group, you can compare the effects of market volatilities on Ferrari NV and Azure Holding 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 Ferrari NV with a short position of Azure Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrari NV and Azure Holding.
Diversification Opportunities for Ferrari NV and Azure Holding
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ferrari and Azure is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ferrari NV and Azure Holding Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azure Holding Group and Ferrari NV 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 Ferrari NV are associated (or correlated) with Azure Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azure Holding Group has no effect on the direction of Ferrari NV i.e., Ferrari NV and Azure Holding go up and down completely randomly.
Pair Corralation between Ferrari NV and Azure Holding
Given the investment horizon of 90 days Ferrari NV is expected to under-perform the Azure Holding. But the stock apears to be less risky and, when comparing its historical volatility, Ferrari NV is 14.36 times less risky than Azure Holding. The stock trades about -0.21 of its potential returns per unit of risk. The Azure Holding Group is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Azure Holding Group on September 3, 2024 and sell it today you would earn a total of 14.00 from holding Azure Holding Group or generate 140.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ferrari NV vs. Azure Holding Group
Performance |
| Timeline |
| Ferrari NV |
| Azure Holding Group |
Ferrari NV and Azure Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrari NV and Azure Holding
The main advantage of trading using opposite Ferrari NV and Azure Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrari NV position performs unexpectedly, Azure Holding 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 Azure Holding will offset losses from the drop in Azure Holding's long position.| Ferrari NV vs. Volkswagen AG Pref | Ferrari NV vs. Volkswagen AG 110 | Ferrari NV vs. Porsche Automobil Holding | Ferrari NV vs. Bayerische Motoren Werke |
| Azure Holding vs. Arhaus Inc | Azure Holding vs. Floor Decor Holdings | Azure Holding vs. Live Ventures | Azure Holding vs. Cisco Systems |
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.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |