Correlation Between Thyssenkrupp and Mueller Industries
Can any of the company-specific risk be diversified away by investing in both Thyssenkrupp and Mueller Industries 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 Thyssenkrupp and Mueller Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between thyssenkrupp AG and Mueller Industries, you can compare the effects of market volatilities on Thyssenkrupp and Mueller Industries 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 Thyssenkrupp with a short position of Mueller Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thyssenkrupp and Mueller Industries.
Diversification Opportunities for Thyssenkrupp and Mueller Industries
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thyssenkrupp and Mueller is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding thyssenkrupp AG and Mueller Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mueller Industries and Thyssenkrupp 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 thyssenkrupp AG are associated (or correlated) with Mueller Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mueller Industries has no effect on the direction of Thyssenkrupp i.e., Thyssenkrupp and Mueller Industries go up and down completely randomly.
Pair Corralation between Thyssenkrupp and Mueller Industries
Assuming the 90 days trading horizon thyssenkrupp AG is expected to generate 0.59 times more return on investment than Mueller Industries. However, thyssenkrupp AG is 1.68 times less risky than Mueller Industries. It trades about 0.02 of its potential returns per unit of risk. Mueller Industries is currently generating about -0.13 per unit of risk. If you would invest 388.00 in thyssenkrupp AG on September 26, 2024 and sell it today you would earn a total of 2.00 from holding thyssenkrupp AG or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
thyssenkrupp AG vs. Mueller Industries
Performance |
| Timeline |
| thyssenkrupp AG |
| Mueller Industries |
Thyssenkrupp and Mueller Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thyssenkrupp and Mueller Industries
The main advantage of trading using opposite Thyssenkrupp and Mueller Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thyssenkrupp position performs unexpectedly, Mueller Industries 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 Mueller Industries will offset losses from the drop in Mueller Industries' long position.| Thyssenkrupp vs. Allegheny Technologies Incorporated | Thyssenkrupp vs. China International Marine | Thyssenkrupp vs. thyssenkrupp AG | Thyssenkrupp vs. Mueller Industries |
| Mueller Industries vs. Allegheny Technologies Incorporated | Mueller Industries vs. China International Marine | Mueller Industries vs. thyssenkrupp AG | Mueller Industries vs. thyssenkrupp AG |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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