Correlation Between Volkswagen and Billy Goat
Can any of the company-specific risk be diversified away by investing in both Volkswagen and Billy Goat 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 Volkswagen and Billy Goat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG and Billy Goat Brands, you can compare the effects of market volatilities on Volkswagen and Billy Goat 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 Volkswagen with a short position of Billy Goat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Billy Goat.
Diversification Opportunities for Volkswagen and Billy Goat
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Volkswagen and Billy is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG and Billy Goat Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Billy Goat Brands and Volkswagen 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 Volkswagen AG are associated (or correlated) with Billy Goat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Billy Goat Brands has no effect on the direction of Volkswagen i.e., Volkswagen and Billy Goat go up and down completely randomly.
Pair Corralation between Volkswagen and Billy Goat
Assuming the 90 days horizon Volkswagen AG is expected to under-perform the Billy Goat. But the pink sheet apears to be less risky and, when comparing its historical volatility, Volkswagen AG is 23.98 times less risky than Billy Goat. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Billy Goat Brands is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 86.00 in Billy Goat Brands on September 2, 2024 and sell it today you would lose (73.00) from holding Billy Goat Brands or give up 84.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volkswagen AG vs. Billy Goat Brands
Performance |
| Timeline |
| Volkswagen AG |
| Billy Goat Brands |
Volkswagen and Billy Goat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Billy Goat
The main advantage of trading using opposite Volkswagen and Billy Goat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, Billy Goat 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 Billy Goat will offset losses from the drop in Billy Goat's long position.| Volkswagen vs. Volkswagen AG 110 | Volkswagen vs. Stellantis NV | Volkswagen vs. Toyota Motor | Volkswagen vs. Honda Motor Co |
| Billy Goat vs. Blackhawk Growth Corp | Billy Goat vs. Guardian Capital Group | Billy Goat vs. Flow Capital Corp | Billy Goat vs. Princeton Capital |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |