Correlation Between VOLKSWAGEN and Intuit

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

By analyzing existing cross correlation between VOLKSWAGEN AG VZ and Intuit Inc, you can compare the effects of market volatilities on VOLKSWAGEN and Intuit 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 VOLKSWAGEN with a short position of Intuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of VOLKSWAGEN and Intuit.

Diversification Opportunities for VOLKSWAGEN and Intuit

-0.78

Correlation Coefficient

VOLKSWAGEN  Intuit

Pay attention - limited upside

The 3 months correlation between VOLKSWAGEN and Intuit is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding VOLKSWAGEN AG VZ and Intuit Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuit Inc and VOLKSWAGEN 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 VOLKSWAGEN AG VZ are associated (or correlated) with Intuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuit Inc has no effect on the direction of VOLKSWAGEN i.e., VOLKSWAGEN and Intuit go up and down completely randomly.

Pair Corralation between VOLKSWAGEN and Intuit

Assuming the 90 days trading horizon VOLKSWAGEN AG VZ is expected to under-perform the Intuit. But the stock apears to be less risky and, when comparing its historical volatility, VOLKSWAGEN AG VZ is 1.35 times less risky than Intuit. The stock trades about -0.17 of its potential returns per unit of risk. The Intuit Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  56,016  in Intuit Inc on September 4, 2024 and sell it today you would earn a total of  4,884  from holding Intuit Inc or generate 8.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

VOLKSWAGEN AG VZ  vs.  Intuit Inc

VOLKSWAGEN AG VZ

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VOLKSWAGEN AG VZ has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Intuit Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intuit Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Intuit may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with VOLKSWAGEN and Intuit

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

The idea behind VOLKSWAGEN AG VZ and Intuit Inc 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.