Correlation Between Volkswagen and 11880 Solutions
Can any of the company-specific risk be diversified away by investing in both Volkswagen and 11880 Solutions 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 11880 Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG and 11880 Solutions AG, you can compare the effects of market volatilities on Volkswagen and 11880 Solutions 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 11880 Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and 11880 Solutions.
Diversification Opportunities for Volkswagen and 11880 Solutions
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Volkswagen and 11880 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG and 11880 Solutions AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 11880 Solutions AG 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 11880 Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 11880 Solutions AG has no effect on the direction of Volkswagen i.e., Volkswagen and 11880 Solutions go up and down completely randomly.
Pair Corralation between Volkswagen and 11880 Solutions
Assuming the 90 days trading horizon Volkswagen AG is expected to under-perform the 11880 Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Volkswagen AG is 1.15 times less risky than 11880 Solutions. The stock trades about -0.35 of its potential returns per unit of risk. The 11880 Solutions AG is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest 86.00 in 11880 Solutions AG on August 27, 2024 and sell it today you would lose (7.00) from holding 11880 Solutions AG or give up 8.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volkswagen AG vs. 11880 Solutions AG
Performance |
| Timeline |
| Volkswagen AG |
| 11880 Solutions AG |
Volkswagen and 11880 Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and 11880 Solutions
The main advantage of trading using opposite Volkswagen and 11880 Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, 11880 Solutions 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 11880 Solutions will offset losses from the drop in 11880 Solutions' long position.| Volkswagen vs. Elmos Semiconductor SE | Volkswagen vs. CapitaLand Investment Limited | Volkswagen vs. ON SEMICONDUCTOR | Volkswagen vs. PennantPark Investment |
| 11880 Solutions vs. Seven West Media | 11880 Solutions vs. BRIT AMER TOBACCO | 11880 Solutions vs. GEAR4MUSIC LS 10 | 11880 Solutions vs. Live Nation Entertainment |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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