Correlation Between TIANDE CHEMICAL and Deutsche Lufthansa
Can any of the company-specific risk be diversified away by investing in both TIANDE CHEMICAL and Deutsche Lufthansa 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 TIANDE CHEMICAL and Deutsche Lufthansa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TIANDE CHEMICAL and Deutsche Lufthansa AG, you can compare the effects of market volatilities on TIANDE CHEMICAL and Deutsche Lufthansa 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 TIANDE CHEMICAL with a short position of Deutsche Lufthansa. Check out your portfolio center. Please also check ongoing floating volatility patterns of TIANDE CHEMICAL and Deutsche Lufthansa.
Diversification Opportunities for TIANDE CHEMICAL and Deutsche Lufthansa
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TIANDE and Deutsche is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding TIANDE CHEMICAL and Deutsche Lufthansa AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Lufthansa and TIANDE CHEMICAL 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 TIANDE CHEMICAL are associated (or correlated) with Deutsche Lufthansa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Lufthansa has no effect on the direction of TIANDE CHEMICAL i.e., TIANDE CHEMICAL and Deutsche Lufthansa go up and down completely randomly.
Pair Corralation between TIANDE CHEMICAL and Deutsche Lufthansa
If you would invest 633.00 in Deutsche Lufthansa AG on September 13, 2024 and sell it today you would earn a total of 26.00 from holding Deutsche Lufthansa AG or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TIANDE CHEMICAL vs. Deutsche Lufthansa AG
Performance |
| Timeline |
| TIANDE CHEMICAL |
| Deutsche Lufthansa |
TIANDE CHEMICAL and Deutsche Lufthansa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TIANDE CHEMICAL and Deutsche Lufthansa
The main advantage of trading using opposite TIANDE CHEMICAL and Deutsche Lufthansa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TIANDE CHEMICAL position performs unexpectedly, Deutsche Lufthansa 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 Deutsche Lufthansa will offset losses from the drop in Deutsche Lufthansa's long position.| TIANDE CHEMICAL vs. Apple Inc | TIANDE CHEMICAL vs. Apple Inc | TIANDE CHEMICAL vs. Apple Inc | TIANDE CHEMICAL vs. Apple Inc |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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