Correlation Between Seven West and Takkt AG
Can any of the company-specific risk be diversified away by investing in both Seven West and Takkt AG 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 Seven West and Takkt AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seven West Media and Takkt AG, you can compare the effects of market volatilities on Seven West and Takkt AG 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 Seven West with a short position of Takkt AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seven West and Takkt AG.
Diversification Opportunities for Seven West and Takkt AG
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seven and Takkt is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Seven West Media and Takkt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Takkt AG and Seven West 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 Seven West Media are associated (or correlated) with Takkt AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Takkt AG has no effect on the direction of Seven West i.e., Seven West and Takkt AG go up and down completely randomly.
Pair Corralation between Seven West and Takkt AG
Assuming the 90 days horizon Seven West Media is expected to generate 1.43 times more return on investment than Takkt AG. However, Seven West is 1.43 times more volatile than Takkt AG. It trades about -0.08 of its potential returns per unit of risk. Takkt AG is currently generating about -0.14 per unit of risk. If you would invest 9.60 in Seven West Media on September 12, 2024 and sell it today you would lose (1.45) from holding Seven West Media or give up 15.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Seven West Media vs. Takkt AG
Performance |
| Timeline |
| Seven West Media |
| Takkt AG |
Seven West and Takkt AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seven West and Takkt AG
The main advantage of trading using opposite Seven West and Takkt AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seven West position performs unexpectedly, Takkt AG 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 Takkt AG will offset losses from the drop in Takkt AG's long position.| Seven West vs. Live Nation Entertainment | Seven West vs. Toho Co | Seven West vs. Superior Plus Corp | Seven West vs. NMI Holdings |
| Takkt AG vs. TFS FINANCIAL | Takkt AG vs. USWE SPORTS AB | Takkt AG vs. REVO INSURANCE SPA | Takkt AG vs. Tradegate AG Wertpapierhandelsbank |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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