Correlation Between Thyssenkrupp and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both Thyssenkrupp and Thyssenkrupp 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 Thyssenkrupp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between thyssenkrupp AG and thyssenkrupp AG, you can compare the effects of market volatilities on Thyssenkrupp and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thyssenkrupp and Thyssenkrupp.
Diversification Opportunities for Thyssenkrupp and Thyssenkrupp
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Thyssenkrupp and Thyssenkrupp is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding thyssenkrupp AG and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of Thyssenkrupp i.e., Thyssenkrupp and Thyssenkrupp go up and down completely randomly.
Pair Corralation between Thyssenkrupp and Thyssenkrupp
Assuming the 90 days trading horizon thyssenkrupp AG is expected to generate 1.42 times more return on investment than Thyssenkrupp. However, Thyssenkrupp is 1.42 times more volatile than thyssenkrupp AG. It trades about 0.0 of its potential returns per unit of risk. thyssenkrupp AG is currently generating about -0.01 per unit of risk. If you would invest 438.00 in thyssenkrupp AG on September 18, 2024 and sell it today you would lose (34.00) from holding thyssenkrupp AG or give up 7.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.42% |
| Values | Daily Returns |
thyssenkrupp AG vs. thyssenkrupp AG
Performance |
| Timeline |
| thyssenkrupp AG |
| thyssenkrupp AG |
Thyssenkrupp and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thyssenkrupp and Thyssenkrupp
The main advantage of trading using opposite Thyssenkrupp and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thyssenkrupp position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.The idea behind thyssenkrupp AG and thyssenkrupp AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Thyssenkrupp vs. Japan Asia Investment | Thyssenkrupp vs. DIVERSIFIED ROYALTY | Thyssenkrupp vs. CARSALESCOM | Thyssenkrupp vs. SLR Investment Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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