Correlation Between Western Digital and Mhlbauer Holding
Can any of the company-specific risk be diversified away by investing in both Western Digital and Mhlbauer Holding 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 Western Digital and Mhlbauer Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Digital and Mhlbauer Holding AG, you can compare the effects of market volatilities on Western Digital and Mhlbauer Holding 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 Western Digital with a short position of Mhlbauer Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Digital and Mhlbauer Holding.
Diversification Opportunities for Western Digital and Mhlbauer Holding
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Mhlbauer is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Western Digital and Mhlbauer Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mhlbauer Holding and Western Digital 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 Western Digital are associated (or correlated) with Mhlbauer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mhlbauer Holding has no effect on the direction of Western Digital i.e., Western Digital and Mhlbauer Holding go up and down completely randomly.
Pair Corralation between Western Digital and Mhlbauer Holding
Assuming the 90 days horizon Western Digital is expected to generate 1.64 times more return on investment than Mhlbauer Holding. However, Western Digital is 1.64 times more volatile than Mhlbauer Holding AG. It trades about -0.01 of its potential returns per unit of risk. Mhlbauer Holding AG is currently generating about -0.17 per unit of risk. If you would invest 6,845 in Western Digital on August 25, 2024 and sell it today you would lose (466.00) from holding Western Digital or give up 6.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Digital vs. Mhlbauer Holding AG
Performance |
| Timeline |
| Western Digital |
| Mhlbauer Holding |
Western Digital and Mhlbauer Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Digital and Mhlbauer Holding
The main advantage of trading using opposite Western Digital and Mhlbauer Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Digital position performs unexpectedly, Mhlbauer Holding 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 Mhlbauer Holding will offset losses from the drop in Mhlbauer Holding's long position.| Western Digital vs. Ramsay Health Care | Western Digital vs. EPSILON HEALTHCARE LTD | Western Digital vs. Globe Trade Centre | Western Digital vs. ELMOS SEMICONDUCTOR |
| Mhlbauer Holding vs. Dell Technologies | Mhlbauer Holding vs. SEIKO EPSON PADR | Mhlbauer Holding vs. Corsair Gaming |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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