Correlation Between VOLKSWAGEN and Socit Gnrale
Can any of the company-specific risk be diversified away by investing in both VOLKSWAGEN and Socit Gnrale 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 Socit Gnrale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VOLKSWAGEN AG VZ and Socit Gnrale Socit, you can compare the effects of market volatilities on VOLKSWAGEN and Socit Gnrale 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 Socit Gnrale. Check out your portfolio center. Please also check ongoing floating volatility patterns of VOLKSWAGEN and Socit Gnrale.
Diversification Opportunities for VOLKSWAGEN and Socit Gnrale
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VOLKSWAGEN and Socit is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding VOLKSWAGEN AG VZ and Socit Gnrale Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Gnrale Socit 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 VZ are associated (or correlated) with Socit Gnrale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Gnrale Socit has no effect on the direction of VOLKSWAGEN i.e., VOLKSWAGEN and Socit Gnrale go up and down completely randomly.
Pair Corralation between VOLKSWAGEN and Socit Gnrale
Assuming the 90 days trading horizon VOLKSWAGEN AG VZ is expected to under-perform the Socit Gnrale. But the stock apears to be less risky and, when comparing its historical volatility, VOLKSWAGEN AG VZ is 1.07 times less risky than Socit Gnrale. The stock trades about -0.02 of its potential returns per unit of risk. The Socit Gnrale Socit is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,016 in Socit Gnrale Socit on August 29, 2024 and sell it today you would earn a total of 527.00 from holding Socit Gnrale Socit or generate 26.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VOLKSWAGEN AG VZ vs. Socit Gnrale Socit
Performance |
| Timeline |
| VOLKSWAGEN AG VZ |
| Socit Gnrale Socit |
VOLKSWAGEN and Socit Gnrale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VOLKSWAGEN and Socit Gnrale
The main advantage of trading using opposite VOLKSWAGEN and Socit Gnrale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VOLKSWAGEN position performs unexpectedly, Socit Gnrale 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 Socit Gnrale will offset losses from the drop in Socit Gnrale's long position.| VOLKSWAGEN vs. Tesla Inc | VOLKSWAGEN vs. Toyota Motor | VOLKSWAGEN vs. Toyota Motor | VOLKSWAGEN vs. BYD Company Limited |
| Socit Gnrale vs. BNP Paribas SA | Socit Gnrale vs. Deutsche Bank Aktiengesellschaft | Socit Gnrale vs. Santander Bank Polska |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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