Correlation Between Volkswagen and Afentra PLC
Can any of the company-specific risk be diversified away by investing in both Volkswagen and Afentra PLC 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 Afentra PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG and Afentra PLC, you can compare the effects of market volatilities on Volkswagen and Afentra PLC 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 Afentra PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Afentra PLC.
Diversification Opportunities for Volkswagen and Afentra PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Volkswagen and Afentra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG and Afentra PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afentra PLC 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 Afentra PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afentra PLC has no effect on the direction of Volkswagen i.e., Volkswagen and Afentra PLC go up and down completely randomly.
Pair Corralation between Volkswagen and Afentra PLC
If you would invest 10,650 in Volkswagen AG on November 27, 2024 and sell it today you would earn a total of 267.00 from holding Volkswagen AG or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Volkswagen AG vs. Afentra PLC
Performance |
| Timeline |
| Volkswagen AG |
| Afentra PLC |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Volkswagen and Afentra PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Afentra PLC
The main advantage of trading using opposite Volkswagen and Afentra PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, Afentra PLC 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 Afentra PLC will offset losses from the drop in Afentra PLC's long position.| Volkswagen vs. Bayerische Motoren Werke | Volkswagen vs. Honda Motor Co | Volkswagen vs. Porsche Automobil Holding | Volkswagen vs. Bayerische Motoren Werke |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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