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 ON 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
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thyssenkrupp and Mueller is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Thyssenkrupp AG ON 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 ON 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 horizon Thyssenkrupp AG ON is expected to generate 1.38 times more return on investment than Mueller Industries. However, Thyssenkrupp is 1.38 times more volatile than Mueller Industries. It trades about 0.24 of its potential returns per unit of risk. Mueller Industries is currently generating about 0.0 per unit of risk. If you would invest 325.00 in Thyssenkrupp AG ON on September 2, 2024 and sell it today you would earn a total of 78.00 from holding Thyssenkrupp AG ON or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thyssenkrupp AG ON vs. Mueller Industries
Performance |
| Timeline |
| Thyssenkrupp AG ON |
| 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. Carpenter Technology | Thyssenkrupp vs. Mueller Industries | Thyssenkrupp vs. Allegheny Technologies Incorporated | Thyssenkrupp vs. ESAB Corp |
| Mueller Industries vs. Insteel Industries | Mueller Industries vs. Carpenter Technology | Mueller Industries vs. Northwest Pipe | Mueller Industries vs. Ryerson Holding 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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