Correlation Between Trainline Plc and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both Trainline Plc 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 Trainline Plc and Thyssenkrupp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trainline Plc and Thyssenkrupp AG ON, you can compare the effects of market volatilities on Trainline Plc 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 Trainline Plc with a short position of Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trainline Plc and Thyssenkrupp.
Diversification Opportunities for Trainline Plc and Thyssenkrupp
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trainline and Thyssenkrupp is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Trainline Plc and Thyssenkrupp AG ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thyssenkrupp AG ON and Trainline Plc 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 Trainline Plc 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 ON has no effect on the direction of Trainline Plc i.e., Trainline Plc and Thyssenkrupp go up and down completely randomly.
Pair Corralation between Trainline Plc and Thyssenkrupp
Assuming the 90 days trading horizon Trainline Plc is expected to generate 1.02 times more return on investment than Thyssenkrupp. However, Trainline Plc is 1.02 times more volatile than Thyssenkrupp AG ON. It trades about 0.04 of its potential returns per unit of risk. Thyssenkrupp AG ON is currently generating about -0.03 per unit of risk. If you would invest 29,770 in Trainline Plc on September 3, 2024 and sell it today you would earn a total of 10,690 from holding Trainline Plc or generate 35.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trainline Plc vs. Thyssenkrupp AG ON
Performance |
| Timeline |
| Trainline Plc |
| Thyssenkrupp AG ON |
Trainline Plc and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trainline Plc and Thyssenkrupp
The main advantage of trading using opposite Trainline Plc and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trainline Plc 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.| Trainline Plc vs. GoldMining | Trainline Plc vs. Metals Exploration Plc | Trainline Plc vs. Panther Metals PLC | Trainline Plc vs. Endeavour Mining Corp |
| Thyssenkrupp vs. Orient Telecoms | Thyssenkrupp vs. Zegona Communications Plc | Thyssenkrupp vs. Aeorema Communications Plc | Thyssenkrupp vs. Arrow Electronics |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |