Correlation Between Volkswagen and Gushen
Can any of the company-specific risk be diversified away by investing in both Volkswagen and Gushen 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 Gushen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG 110 and Gushen Inc, you can compare the effects of market volatilities on Volkswagen and Gushen 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 Gushen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Gushen.
Diversification Opportunities for Volkswagen and Gushen
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Volkswagen and Gushen is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG 110 and Gushen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gushen 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 110 are associated (or correlated) with Gushen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gushen Inc has no effect on the direction of Volkswagen i.e., Volkswagen and Gushen go up and down completely randomly.
Pair Corralation between Volkswagen and Gushen
If you would invest 2,270 in Gushen Inc on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Gushen Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Volkswagen AG 110 vs. Gushen Inc
Performance |
| Timeline |
| Volkswagen AG 110 |
| Gushen Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Volkswagen and Gushen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Gushen
The main advantage of trading using opposite Volkswagen and Gushen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, Gushen 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 Gushen will offset losses from the drop in Gushen's long position.| Volkswagen vs. Porsche Automobile Holding | Volkswagen vs. Ferrari NV | Volkswagen vs. Toyota Motor | Volkswagen vs. General Motors |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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