Correlation Between SCOTT TECHNOLOGY and Daimler Truck
Can any of the company-specific risk be diversified away by investing in both SCOTT TECHNOLOGY and Daimler Truck 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 SCOTT TECHNOLOGY and Daimler Truck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOTT TECHNOLOGY and Daimler Truck Holding, you can compare the effects of market volatilities on SCOTT TECHNOLOGY and Daimler Truck 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 SCOTT TECHNOLOGY with a short position of Daimler Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOTT TECHNOLOGY and Daimler Truck.
Diversification Opportunities for SCOTT TECHNOLOGY and Daimler Truck
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between SCOTT and Daimler is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding SCOTT TECHNOLOGY and Daimler Truck Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daimler Truck Holding and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY are associated (or correlated) with Daimler Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daimler Truck Holding has no effect on the direction of SCOTT TECHNOLOGY i.e., SCOTT TECHNOLOGY and Daimler Truck go up and down completely randomly.
Pair Corralation between SCOTT TECHNOLOGY and Daimler Truck
Assuming the 90 days trading horizon SCOTT TECHNOLOGY is expected to under-perform the Daimler Truck. But the stock apears to be less risky and, when comparing its historical volatility, SCOTT TECHNOLOGY is 1.26 times less risky than Daimler Truck. The stock trades about -0.05 of its potential returns per unit of risk. The Daimler Truck Holding is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,722 in Daimler Truck Holding on October 12, 2024 and sell it today you would earn a total of 116.00 from holding Daimler Truck Holding or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOTT TECHNOLOGY vs. Daimler Truck Holding
Performance |
| Timeline |
| SCOTT TECHNOLOGY |
| Daimler Truck Holding |
SCOTT TECHNOLOGY and Daimler Truck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOTT TECHNOLOGY and Daimler Truck
The main advantage of trading using opposite SCOTT TECHNOLOGY and Daimler Truck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOTT TECHNOLOGY position performs unexpectedly, Daimler Truck 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 Daimler Truck will offset losses from the drop in Daimler Truck's long position.| SCOTT TECHNOLOGY vs. CITIC Telecom International | SCOTT TECHNOLOGY vs. ecotel communication ag | SCOTT TECHNOLOGY vs. Citic Telecom International | SCOTT TECHNOLOGY vs. Comba Telecom Systems |
| Daimler Truck vs. UPDATE SOFTWARE | Daimler Truck vs. GWILLI FOOD | Daimler Truck vs. National Beverage Corp | Daimler Truck vs. SCOTT TECHNOLOGY |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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