Correlation Between Sporttotal and PEH WERTPAPIER
Can any of the company-specific risk be diversified away by investing in both Sporttotal and PEH WERTPAPIER 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 Sporttotal and PEH WERTPAPIER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sporttotal AG and PEH WERTPAPIER, you can compare the effects of market volatilities on Sporttotal and PEH WERTPAPIER 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 Sporttotal with a short position of PEH WERTPAPIER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sporttotal and PEH WERTPAPIER.
Diversification Opportunities for Sporttotal and PEH WERTPAPIER
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sporttotal and PEH is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sporttotal AG and PEH WERTPAPIER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEH WERTPAPIER and Sporttotal 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 Sporttotal AG are associated (or correlated) with PEH WERTPAPIER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEH WERTPAPIER has no effect on the direction of Sporttotal i.e., Sporttotal and PEH WERTPAPIER go up and down completely randomly.
Pair Corralation between Sporttotal and PEH WERTPAPIER
Assuming the 90 days trading horizon Sporttotal AG is expected to under-perform the PEH WERTPAPIER. In addition to that, Sporttotal is 3.54 times more volatile than PEH WERTPAPIER. It trades about -0.01 of its total potential returns per unit of risk. PEH WERTPAPIER is currently generating about 0.04 per unit of volatility. If you would invest 1,966 in PEH WERTPAPIER on September 3, 2024 and sell it today you would earn a total of 194.00 from holding PEH WERTPAPIER or generate 9.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sporttotal AG vs. PEH WERTPAPIER
Performance |
| Timeline |
| Sporttotal AG |
| PEH WERTPAPIER |
Sporttotal and PEH WERTPAPIER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sporttotal and PEH WERTPAPIER
The main advantage of trading using opposite Sporttotal and PEH WERTPAPIER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sporttotal position performs unexpectedly, PEH WERTPAPIER 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 PEH WERTPAPIER will offset losses from the drop in PEH WERTPAPIER's long position.| Sporttotal vs. TOTAL GABON | Sporttotal vs. Walgreens Boots Alliance | Sporttotal vs. Peak Resources Limited |
| PEH WERTPAPIER vs. Gamma Communications plc | PEH WERTPAPIER vs. Charter Communications | PEH WERTPAPIER vs. Citic Telecom International | PEH WERTPAPIER vs. American Eagle Outfitters |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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