Correlation Between Volkswagen and Volkswagen
Can any of the company-specific risk be diversified away by investing in both Volkswagen and Volkswagen 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 Volkswagen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG Pref and Volkswagen AG, you can compare the effects of market volatilities on Volkswagen and Volkswagen 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 Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Volkswagen.
Diversification Opportunities for Volkswagen and Volkswagen
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Volkswagen and Volkswagen is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG Pref and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen 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 Pref are associated (or correlated) with Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of Volkswagen i.e., Volkswagen and Volkswagen go up and down completely randomly.
Pair Corralation between Volkswagen and Volkswagen
Assuming the 90 days horizon Volkswagen AG Pref is expected to generate 0.78 times more return on investment than Volkswagen. However, Volkswagen AG Pref is 1.29 times less risky than Volkswagen. It trades about -0.02 of its potential returns per unit of risk. Volkswagen AG is currently generating about -0.02 per unit of risk. If you would invest 970.00 in Volkswagen AG Pref on August 25, 2024 and sell it today you would lose (119.00) from holding Volkswagen AG Pref or give up 12.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
Volkswagen AG Pref vs. Volkswagen AG
Performance |
| Timeline |
| Volkswagen AG Pref |
| Volkswagen AG |
Volkswagen and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Volkswagen
The main advantage of trading using opposite Volkswagen and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| Volkswagen vs. Volkswagen AG 110 | Volkswagen vs. Porsche Automobil Holding | Volkswagen vs. Ferrari NV | Volkswagen vs. Bayerische Motoren Werke |
| Volkswagen vs. Isuzu Motors | Volkswagen vs. Renault SA | Volkswagen vs. Mazda Motor Corp | Volkswagen vs. Bayerische Motoren Werke |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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