Correlation Between Varta AG and POLAR POWER
Can any of the company-specific risk be diversified away by investing in both Varta AG and POLAR POWER 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 Varta AG and POLAR POWER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Varta AG and POLAR POWER INC, you can compare the effects of market volatilities on Varta AG and POLAR POWER 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 Varta AG with a short position of POLAR POWER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Varta AG and POLAR POWER.
Diversification Opportunities for Varta AG and POLAR POWER
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Varta and POLAR is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Varta AG and POLAR POWER INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POLAR POWER INC and Varta AG 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 Varta AG are associated (or correlated) with POLAR POWER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POLAR POWER INC has no effect on the direction of Varta AG i.e., Varta AG and POLAR POWER go up and down completely randomly.
Pair Corralation between Varta AG and POLAR POWER
Assuming the 90 days trading horizon Varta AG is expected to under-perform the POLAR POWER. In addition to that, Varta AG is 1.55 times more volatile than POLAR POWER INC. It trades about -0.02 of its total potential returns per unit of risk. POLAR POWER INC is currently generating about -0.01 per unit of volatility. If you would invest 888.00 in POLAR POWER INC on November 6, 2024 and sell it today you would lose (600.00) from holding POLAR POWER INC or give up 67.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.6% |
| Values | Daily Returns |
Varta AG vs. POLAR POWER INC
Performance |
| Timeline |
| Varta AG |
| POLAR POWER INC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Varta AG and POLAR POWER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Varta AG and POLAR POWER
The main advantage of trading using opposite Varta AG and POLAR POWER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Varta AG position performs unexpectedly, POLAR POWER 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 POLAR POWER will offset losses from the drop in POLAR POWER's long position.| Varta AG vs. Verizon Communications | Varta AG vs. CITIC Telecom International | Varta AG vs. ecotel communication ag | Varta AG vs. MagnaChip Semiconductor Corp |
| POLAR POWER vs. Taiwan Semiconductor Manufacturing | POLAR POWER vs. Columbia Sportswear | POLAR POWER vs. Fukuyama Transporting Co | POLAR POWER vs. USWE SPORTS AB |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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