Correlation Between Hays Plc and METALL ZUG
Can any of the company-specific risk be diversified away by investing in both Hays Plc and METALL ZUG 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 Hays Plc and METALL ZUG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hays plc and METALL ZUG AG, you can compare the effects of market volatilities on Hays Plc and METALL ZUG 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 Hays Plc with a short position of METALL ZUG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hays Plc and METALL ZUG.
Diversification Opportunities for Hays Plc and METALL ZUG
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hays and METALL is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hays plc and METALL ZUG AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METALL ZUG AG and Hays Plc 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 Hays plc are associated (or correlated) with METALL ZUG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METALL ZUG AG has no effect on the direction of Hays Plc i.e., Hays Plc and METALL ZUG go up and down completely randomly.
Pair Corralation between Hays Plc and METALL ZUG
Assuming the 90 days trading horizon Hays plc is expected to under-perform the METALL ZUG. In addition to that, Hays Plc is 1.83 times more volatile than METALL ZUG AG. It trades about -0.09 of its total potential returns per unit of risk. METALL ZUG AG is currently generating about -0.12 per unit of volatility. If you would invest 132,000 in METALL ZUG AG on September 15, 2024 and sell it today you would lose (17,500) from holding METALL ZUG AG or give up 13.26% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hays plc vs. METALL ZUG AG
Performance |
Timeline |
Hays plc |
METALL ZUG AG |
Hays Plc and METALL ZUG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hays Plc and METALL ZUG
The main advantage of trading using opposite Hays Plc and METALL ZUG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hays Plc position performs unexpectedly, METALL ZUG 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 METALL ZUG will offset losses from the drop in METALL ZUG's long position.Hays Plc vs. DFS Furniture PLC | Hays Plc vs. Home Depot | Hays Plc vs. Schweiter Technologies AG | Hays Plc vs. Ecclesiastical Insurance Office |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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