Correlation Between Volkswagen and VMG Consumer
Can any of the company-specific risk be diversified away by investing in both Volkswagen and VMG Consumer 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 VMG Consumer 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 VMG Consumer Acquisition, you can compare the effects of market volatilities on Volkswagen and VMG Consumer 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 VMG Consumer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and VMG Consumer.
Diversification Opportunities for Volkswagen and VMG Consumer
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Volkswagen and VMG is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG 110 and VMG Consumer Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VMG Consumer Acquisition 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 VMG Consumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VMG Consumer Acquisition has no effect on the direction of Volkswagen i.e., Volkswagen and VMG Consumer go up and down completely randomly.
Pair Corralation between Volkswagen and VMG Consumer
If you would invest 1,039 in VMG Consumer Acquisition on August 29, 2024 and sell it today you would earn a total of 0.00 from holding VMG Consumer Acquisition or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Volkswagen AG 110 vs. VMG Consumer Acquisition
Performance |
| Timeline |
| Volkswagen AG 110 |
| VMG Consumer Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Volkswagen and VMG Consumer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and VMG Consumer
The main advantage of trading using opposite Volkswagen and VMG Consumer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, VMG Consumer 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 VMG Consumer will offset losses from the drop in VMG Consumer's long position.| Volkswagen vs. Porsche Automobile Holding | Volkswagen vs. Bayerische Motoren Werke | Volkswagen vs. Volkswagen AG | Volkswagen vs. Mercedes Benz Group AG |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |