Correlation Between Thyssenkrupp and China International
Can any of the company-specific risk be diversified away by investing in both Thyssenkrupp and China International 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 China International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between thyssenkrupp AG and China International Marine, you can compare the effects of market volatilities on Thyssenkrupp and China International 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 China International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thyssenkrupp and China International.
Diversification Opportunities for Thyssenkrupp and China International
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thyssenkrupp and China is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding thyssenkrupp AG and China International Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China International 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 China International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China International has no effect on the direction of Thyssenkrupp i.e., Thyssenkrupp and China International go up and down completely randomly.
Pair Corralation between Thyssenkrupp and China International
Assuming the 90 days trading horizon thyssenkrupp AG is expected to generate 1.76 times more return on investment than China International. However, Thyssenkrupp is 1.76 times more volatile than China International Marine. It trades about 0.05 of its potential returns per unit of risk. China International Marine is currently generating about -0.02 per unit of risk. If you would invest 370.00 in thyssenkrupp AG on September 26, 2024 and sell it today you would earn a total of 10.00 from holding thyssenkrupp AG or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
thyssenkrupp AG vs. China International Marine
Performance |
| Timeline |
| thyssenkrupp AG |
| China International |
Thyssenkrupp and China International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thyssenkrupp and China International
The main advantage of trading using opposite Thyssenkrupp and China International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thyssenkrupp position performs unexpectedly, China International 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 China International will offset losses from the drop in China International's long position.| Thyssenkrupp vs. Allegheny Technologies Incorporated | Thyssenkrupp vs. China International Marine | Thyssenkrupp vs. thyssenkrupp AG | Thyssenkrupp vs. Mueller Industries |
| China International vs. Allegheny Technologies Incorporated | China International vs. thyssenkrupp AG | China International vs. thyssenkrupp AG | China International vs. Mueller Industries |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |