Correlation Between Tegna and Volkswagen
Can any of the company-specific risk be diversified away by investing in both Tegna and Volkswagen 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 Tegna and Volkswagen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tegna Inc and Volkswagen AG VZO, you can compare the effects of market volatilities on Tegna and Volkswagen 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 Tegna with a short position of Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tegna and Volkswagen.
Diversification Opportunities for Tegna and Volkswagen
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tegna and Volkswagen is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Tegna Inc and Volkswagen AG VZO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG VZO and Tegna 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 Tegna Inc are associated (or correlated) with Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG VZO has no effect on the direction of Tegna i.e., Tegna and Volkswagen go up and down completely randomly.
Pair Corralation between Tegna and Volkswagen
Given the investment horizon of 90 days Tegna Inc is expected to under-perform the Volkswagen. But the stock apears to be less risky and, when comparing its historical volatility, Tegna Inc is 2.96 times less risky than Volkswagen. The stock trades about -0.03 of its potential returns per unit of risk. The Volkswagen AG VZO is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 9,066 in Volkswagen AG VZO on November 9, 2024 and sell it today you would earn a total of 1,012 from holding Volkswagen AG VZO or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tegna Inc vs. Volkswagen AG VZO
Performance |
| Timeline |
| Tegna Inc |
| Volkswagen AG VZO |
Tegna and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tegna and Volkswagen
The main advantage of trading using opposite Tegna and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tegna position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| Tegna vs. E W Scripps | Tegna vs. Gray Television | Tegna vs. iHeartMedia Class A | Tegna vs. Cumulus Media Class |
| Volkswagen vs. Volkswagen AG Pref | Volkswagen vs. Mercedes Benz Group AG | Volkswagen vs. Bayerische Motoren Werke | Volkswagen vs. Honda Motor Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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