Correlation Between Volkswagen and Fisker
Can any of the company-specific risk be diversified away by investing in both Volkswagen and Fisker 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 Fisker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG VZO and Fisker Inc, you can compare the effects of market volatilities on Volkswagen and Fisker 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 Fisker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Fisker.
Diversification Opportunities for Volkswagen and Fisker
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Volkswagen and Fisker is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG VZO and Fisker Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisker Inc 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 VZO are associated (or correlated) with Fisker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisker Inc has no effect on the direction of Volkswagen i.e., Volkswagen and Fisker go up and down completely randomly.
Pair Corralation between Volkswagen and Fisker
If you would invest 615.00 in Fisker Inc on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Fisker Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Volkswagen AG VZO vs. Fisker Inc
Performance |
| Timeline |
| Volkswagen AG VZO |
| Fisker Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Volkswagen and Fisker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Fisker
The main advantage of trading using opposite Volkswagen and Fisker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, Fisker 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 Fisker will offset losses from the drop in Fisker's long position.| Volkswagen vs. Volkswagen AG Pref | Volkswagen vs. Mercedes Benz Group AG | Volkswagen vs. Bayerische Motoren Werke | Volkswagen 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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