Correlation Between SANOMA - and Markel
Can any of the company-specific risk be diversified away by investing in both SANOMA - and Markel 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 SANOMA - and Markel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANOMA Dusseldorf and Markel, you can compare the effects of market volatilities on SANOMA - and Markel 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 SANOMA - with a short position of Markel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANOMA - and Markel.
Diversification Opportunities for SANOMA - and Markel
Poor diversification
The 3 months correlation between SANOMA and Markel is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SANOMA Dusseldorf and Markel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Markel and SANOMA - 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 SANOMA Dusseldorf are associated (or correlated) with Markel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Markel has no effect on the direction of SANOMA - i.e., SANOMA - and Markel go up and down completely randomly.
Pair Corralation between SANOMA - and Markel
Assuming the 90 days trading horizon SANOMA Dusseldorf is expected to generate 1.17 times more return on investment than Markel. However, SANOMA - is 1.17 times more volatile than Markel. It trades about 0.16 of its potential returns per unit of risk. Markel is currently generating about 0.11 per unit of risk. If you would invest 734.00 in SANOMA Dusseldorf on October 19, 2024 and sell it today you would earn a total of 76.00 from holding SANOMA Dusseldorf or generate 10.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SANOMA Dusseldorf vs. Markel
Performance |
| Timeline |
| SANOMA Dusseldorf |
| Markel |
SANOMA - and Markel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANOMA - and Markel
The main advantage of trading using opposite SANOMA - and Markel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANOMA - position performs unexpectedly, Markel 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 Markel will offset losses from the drop in Markel's long position.The idea behind SANOMA Dusseldorf and Markel pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Markel vs. The Progressive | Markel vs. The Allstate | Markel vs. PICC Property and | Markel vs. Cincinnati Financial |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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