Correlation Between Gelsenwasser and WUXI BIOLOGICS-000000
Can any of the company-specific risk be diversified away by investing in both Gelsenwasser and WUXI BIOLOGICS-000000 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 Gelsenwasser and WUXI BIOLOGICS-000000 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gelsenwasser AG and WUXI BIOLOGICS 00000083, you can compare the effects of market volatilities on Gelsenwasser and WUXI BIOLOGICS-000000 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 Gelsenwasser with a short position of WUXI BIOLOGICS-000000. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gelsenwasser and WUXI BIOLOGICS-000000.
Diversification Opportunities for Gelsenwasser and WUXI BIOLOGICS-000000
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gelsenwasser and WUXI is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gelsenwasser AG and WUXI BIOLOGICS 00000083 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WUXI BIOLOGICS 00000083 and Gelsenwasser 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 Gelsenwasser AG are associated (or correlated) with WUXI BIOLOGICS-000000. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WUXI BIOLOGICS 00000083 has no effect on the direction of Gelsenwasser i.e., Gelsenwasser and WUXI BIOLOGICS-000000 go up and down completely randomly.
Pair Corralation between Gelsenwasser and WUXI BIOLOGICS-000000
Assuming the 90 days horizon Gelsenwasser AG is expected to generate 0.6 times more return on investment than WUXI BIOLOGICS-000000. However, Gelsenwasser AG is 1.67 times less risky than WUXI BIOLOGICS-000000. It trades about -0.04 of its potential returns per unit of risk. WUXI BIOLOGICS 00000083 is currently generating about -0.03 per unit of risk. If you would invest 89,950 in Gelsenwasser AG on September 2, 2024 and sell it today you would lose (39,950) from holding Gelsenwasser AG or give up 44.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gelsenwasser AG vs. WUXI BIOLOGICS 00000083
Performance |
| Timeline |
| Gelsenwasser AG |
| WUXI BIOLOGICS 00000083 |
Gelsenwasser and WUXI BIOLOGICS-000000 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gelsenwasser and WUXI BIOLOGICS-000000
The main advantage of trading using opposite Gelsenwasser and WUXI BIOLOGICS-000000 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gelsenwasser position performs unexpectedly, WUXI BIOLOGICS-000000 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 WUXI BIOLOGICS-000000 will offset losses from the drop in WUXI BIOLOGICS-000000's long position.| Gelsenwasser vs. Cleanaway Waste Management | Gelsenwasser vs. Mobilezone Holding AG | Gelsenwasser vs. Cogent Communications Holdings | Gelsenwasser vs. Zoom Video Communications |
| WUXI BIOLOGICS-000000 vs. Selective Insurance Group | WUXI BIOLOGICS-000000 vs. Singapore Reinsurance | WUXI BIOLOGICS-000000 vs. United Insurance Holdings | WUXI BIOLOGICS-000000 vs. Ubisoft Entertainment SA |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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