Correlation Between Symrise Ag and Hannover
Can any of the company-specific risk be diversified away by investing in both Symrise Ag and Hannover 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 Symrise Ag and Hannover into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Symrise Ag PK and Hannover Re, you can compare the effects of market volatilities on Symrise Ag and Hannover 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 Symrise Ag with a short position of Hannover. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symrise Ag and Hannover.
Diversification Opportunities for Symrise Ag and Hannover
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Symrise and Hannover is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Symrise Ag PK and Hannover Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannover Re and Symrise Ag 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 Symrise Ag PK are associated (or correlated) with Hannover. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannover Re has no effect on the direction of Symrise Ag i.e., Symrise Ag and Hannover go up and down completely randomly.
Pair Corralation between Symrise Ag and Hannover
Assuming the 90 days horizon Symrise Ag PK is expected to under-perform the Hannover. In addition to that, Symrise Ag is 1.1 times more volatile than Hannover Re. It trades about -0.31 of its total potential returns per unit of risk. Hannover Re is currently generating about -0.04 per unit of volatility. If you would invest 4,392 in Hannover Re on August 31, 2024 and sell it today you would lose (51.00) from holding Hannover Re or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Symrise Ag PK vs. Hannover Re
Performance |
| Timeline |
| Symrise Ag PK |
| Hannover Re |
Symrise Ag and Hannover Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Symrise Ag and Hannover
The main advantage of trading using opposite Symrise Ag and Hannover positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symrise Ag position performs unexpectedly, Hannover 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 Hannover will offset losses from the drop in Hannover's long position.| Symrise Ag vs. Sherwin Williams Co | Symrise Ag vs. Air Liquide SA | Symrise Ag vs. LAir Liquide SA | Symrise Ag vs. Air Products and |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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