Correlation Between Volkswagen and Exor NV
Can any of the company-specific risk be diversified away by investing in both Volkswagen and Exor NV 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 Exor NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG and Exor NV, you can compare the effects of market volatilities on Volkswagen and Exor NV 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 Exor NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Exor NV.
Diversification Opportunities for Volkswagen and Exor NV
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Volkswagen and Exor is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG and Exor NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exor NV 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 Exor NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exor NV has no effect on the direction of Volkswagen i.e., Volkswagen and Exor NV go up and down completely randomly.
Pair Corralation between Volkswagen and Exor NV
Assuming the 90 days horizon Volkswagen AG is expected to under-perform the Exor NV. In addition to that, Volkswagen is 1.52 times more volatile than Exor NV. It trades about -0.06 of its total potential returns per unit of risk. Exor NV is currently generating about 0.02 per unit of volatility. If you would invest 9,403 in Exor NV on August 24, 2024 and sell it today you would earn a total of 468.00 from holding Exor NV or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.4% |
| Values | Daily Returns |
Volkswagen AG vs. Exor NV
Performance |
| Timeline |
| Volkswagen AG |
| Exor NV |
Volkswagen and Exor NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Exor NV
The main advantage of trading using opposite Volkswagen and Exor NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, Exor NV 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 Exor NV will offset losses from the drop in Exor NV's long position.| Volkswagen vs. Isuzu Motors | Volkswagen vs. Renault SA | Volkswagen vs. Mazda Motor Corp | Volkswagen vs. Bayerische Motoren Werke |
| Exor NV vs. Zapp Electric Vehicles | Exor NV vs. Guangzhou Automobile Group | Exor NV vs. NFI Group | Exor NV vs. Honda Motor Co |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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