Correlation Between Wstenrot Wrttembergische and LIFENET INSURANCE
Can any of the company-specific risk be diversified away by investing in both Wstenrot Wrttembergische and LIFENET INSURANCE 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 Wstenrot Wrttembergische and LIFENET INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wstenrot Wrttembergische AG and LIFENET INSURANCE CO, you can compare the effects of market volatilities on Wstenrot Wrttembergische and LIFENET INSURANCE 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 Wstenrot Wrttembergische with a short position of LIFENET INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wstenrot Wrttembergische and LIFENET INSURANCE.
Diversification Opportunities for Wstenrot Wrttembergische and LIFENET INSURANCE
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wstenrot and LIFENET is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Wstenrot Wrttembergische AG and LIFENET INSURANCE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFENET INSURANCE and Wstenrot Wrttembergische 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 Wstenrot Wrttembergische AG are associated (or correlated) with LIFENET INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFENET INSURANCE has no effect on the direction of Wstenrot Wrttembergische i.e., Wstenrot Wrttembergische and LIFENET INSURANCE go up and down completely randomly.
Pair Corralation between Wstenrot Wrttembergische and LIFENET INSURANCE
Assuming the 90 days trading horizon Wstenrot Wrttembergische AG is expected to under-perform the LIFENET INSURANCE. But the stock apears to be less risky and, when comparing its historical volatility, Wstenrot Wrttembergische AG is 2.65 times less risky than LIFENET INSURANCE. The stock trades about -0.04 of its potential returns per unit of risk. The LIFENET INSURANCE CO is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 820.00 in LIFENET INSURANCE CO on September 26, 2024 and sell it today you would earn a total of 300.00 from holding LIFENET INSURANCE CO or generate 36.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wstenrot Wrttembergische AG vs. LIFENET INSURANCE CO
Performance |
| Timeline |
| Wstenrot Wrttembergische |
| LIFENET INSURANCE |
Wstenrot Wrttembergische and LIFENET INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wstenrot Wrttembergische and LIFENET INSURANCE
The main advantage of trading using opposite Wstenrot Wrttembergische and LIFENET INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wstenrot Wrttembergische position performs unexpectedly, LIFENET INSURANCE 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 LIFENET INSURANCE will offset losses from the drop in LIFENET INSURANCE's long position.| Wstenrot Wrttembergische vs. Prudential plc | Wstenrot Wrttembergische vs. LIFENET INSURANCE CO | Wstenrot Wrttembergische vs. Northern Trust | Wstenrot Wrttembergische vs. ADRIATIC METALS LS 013355 |
| LIFENET INSURANCE vs. Prudential plc | LIFENET INSURANCE vs. Wstenrot Wrttembergische AG | LIFENET INSURANCE vs. Northern Trust | LIFENET INSURANCE vs. ADRIATIC METALS LS 013355 |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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