Correlation Between Industrial and Bayer AG
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By analyzing existing cross correlation between Industrial and Commercial and Bayer AG NA, you can compare the effects of market volatilities on Industrial and Bayer AG 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 Industrial with a short position of Bayer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Bayer AG.
Diversification Opportunities for Industrial and Bayer AG
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Industrial and Bayer is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Bayer AG NA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer AG NA and Industrial 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 Industrial and Commercial are associated (or correlated) with Bayer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer AG NA has no effect on the direction of Industrial i.e., Industrial and Bayer AG go up and down completely randomly.
Pair Corralation between Industrial and Bayer AG
Assuming the 90 days horizon Industrial and Commercial is expected to generate 1.13 times more return on investment than Bayer AG. However, Industrial is 1.13 times more volatile than Bayer AG NA. It trades about 0.1 of its potential returns per unit of risk. Bayer AG NA is currently generating about -0.2 per unit of risk. If you would invest 49.00 in Industrial and Commercial on September 17, 2024 and sell it today you would earn a total of 9.00 from holding Industrial and Commercial or generate 18.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Industrial and Commercial vs. Bayer AG NA
Performance |
Timeline |
Industrial and Commercial |
Bayer AG NA |
Industrial and Bayer AG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Industrial and Bayer AG
The main advantage of trading using opposite Industrial and Bayer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial position performs unexpectedly, Bayer AG 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 Bayer AG will offset losses from the drop in Bayer AG's long position.Industrial vs. AGRICULTBK HADR25 YC | Industrial vs. The Toronto Dominion Bank | Industrial vs. Superior Plus Corp | Industrial vs. SIVERS SEMICONDUCTORS AB |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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