Correlation Between Volkswagen and Shionogi
Can any of the company-specific risk be diversified away by investing in both Volkswagen and Shionogi 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 Shionogi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG and Shionogi Co, you can compare the effects of market volatilities on Volkswagen and Shionogi 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 Shionogi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Shionogi.
Diversification Opportunities for Volkswagen and Shionogi
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Volkswagen and Shionogi is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG and Shionogi Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shionogi 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 Shionogi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shionogi has no effect on the direction of Volkswagen i.e., Volkswagen and Shionogi go up and down completely randomly.
Pair Corralation between Volkswagen and Shionogi
Assuming the 90 days trading horizon Volkswagen AG is expected to under-perform the Shionogi. But the stock apears to be less risky and, when comparing its historical volatility, Volkswagen AG is 1.1 times less risky than Shionogi. The stock trades about -0.05 of its potential returns per unit of risk. The Shionogi Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,587 in Shionogi Co on September 3, 2024 and sell it today you would lose (317.00) from holding Shionogi Co or give up 19.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volkswagen AG vs. Shionogi Co
Performance |
| Timeline |
| Volkswagen AG |
| Shionogi |
Volkswagen and Shionogi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Shionogi
The main advantage of trading using opposite Volkswagen and Shionogi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, Shionogi 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 Shionogi will offset losses from the drop in Shionogi's long position.| Volkswagen vs. Hemisphere Energy Corp | Volkswagen vs. Microbot Medical | Volkswagen vs. Air Lease | Volkswagen vs. Chunghwa Telecom 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |