Correlation Between Onxeo SA and Continental Aktiengesellscha

Can any of the company-specific risk be diversified away by investing in both Onxeo SA and Continental Aktiengesellscha 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 Onxeo SA and Continental Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Onxeo SA and Continental Aktiengesellschaft, you can compare the effects of market volatilities on Onxeo SA and Continental Aktiengesellscha 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 Onxeo SA with a short position of Continental Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Onxeo SA and Continental Aktiengesellscha.

Diversification Opportunities for Onxeo SA and Continental Aktiengesellscha

-0.52

Correlation Coefficient

Onxeo SA  Continental Aktiengesellscha

Excellent diversification

The 3 months correlation between Onxeo and Continental is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Onxeo SA and Continental Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Aktiengesellscha and Onxeo SA 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 Onxeo SA are associated (or correlated) with Continental Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Aktiengesellscha has no effect on the direction of Onxeo SA i.e., Onxeo SA and Continental Aktiengesellscha go up and down completely randomly.

Pair Corralation between Onxeo SA and Continental Aktiengesellscha

Assuming the 90 days horizon Onxeo SA is expected to under-perform the Continental Aktiengesellscha. In addition to that, Onxeo SA is 3.24 times more volatile than Continental Aktiengesellschaft. It trades about 0.0 of its total potential returns per unit of risk. Continental Aktiengesellschaft is currently generating about 0.09 per unit of volatility. If you would invest  5,794  in Continental Aktiengesellschaft on October 1, 2024 and sell it today you would earn a total of  674.00  from holding Continental Aktiengesellschaft or generate 11.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Onxeo SA  vs.  Continental Aktiengesellschaft

Onxeo SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Onxeo SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Onxeo SA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Continental Aktiengesellscha

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Continental Aktiengesellschaft are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Continental Aktiengesellscha reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Onxeo SA and Continental Aktiengesellscha

The main advantage of trading using opposite Onxeo SA and Continental Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Onxeo SA position performs unexpectedly, Continental Aktiengesellscha 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 Continental Aktiengesellscha will offset losses from the drop in Continental Aktiengesellscha's long position.

The idea behind Onxeo SA and Continental Aktiengesellschaft pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.