Correlation Between Thyssenkrupp and ONWARD MEDICAL
Can any of the company-specific risk be diversified away by investing in both Thyssenkrupp and ONWARD MEDICAL 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 Thyssenkrupp and ONWARD MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between thyssenkrupp AG and ONWARD MEDICAL BV, you can compare the effects of market volatilities on Thyssenkrupp and ONWARD MEDICAL 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 Thyssenkrupp with a short position of ONWARD MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thyssenkrupp and ONWARD MEDICAL.
Diversification Opportunities for Thyssenkrupp and ONWARD MEDICAL
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thyssenkrupp and ONWARD is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding thyssenkrupp AG and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV and Thyssenkrupp 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 thyssenkrupp AG are associated (or correlated) with ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of Thyssenkrupp i.e., Thyssenkrupp and ONWARD MEDICAL go up and down completely randomly.
Pair Corralation between Thyssenkrupp and ONWARD MEDICAL
Assuming the 90 days trading horizon thyssenkrupp AG is expected to generate 1.13 times more return on investment than ONWARD MEDICAL. However, Thyssenkrupp is 1.13 times more volatile than ONWARD MEDICAL BV. It trades about 0.09 of its potential returns per unit of risk. ONWARD MEDICAL BV is currently generating about 0.06 per unit of risk. If you would invest 324.00 in thyssenkrupp AG on September 26, 2024 and sell it today you would earn a total of 60.00 from holding thyssenkrupp AG or generate 18.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
thyssenkrupp AG vs. ONWARD MEDICAL BV
Performance |
Timeline |
thyssenkrupp AG |
ONWARD MEDICAL BV |
Thyssenkrupp and ONWARD MEDICAL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Thyssenkrupp and ONWARD MEDICAL
The main advantage of trading using opposite Thyssenkrupp and ONWARD MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thyssenkrupp position performs unexpectedly, ONWARD MEDICAL 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 ONWARD MEDICAL will offset losses from the drop in ONWARD MEDICAL's long position.Thyssenkrupp vs. ONWARD MEDICAL BV | Thyssenkrupp vs. Clearside Biomedical | Thyssenkrupp vs. Avanos Medical | Thyssenkrupp vs. WillScot Mobile Mini |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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