Correlation Between G8 EDUCATION and OSRAM LICHT
Can any of the company-specific risk be diversified away by investing in both G8 EDUCATION and OSRAM LICHT 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 G8 EDUCATION and OSRAM LICHT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G8 EDUCATION and OSRAM LICHT N, you can compare the effects of market volatilities on G8 EDUCATION and OSRAM LICHT 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 G8 EDUCATION with a short position of OSRAM LICHT. Check out your portfolio center. Please also check ongoing floating volatility patterns of G8 EDUCATION and OSRAM LICHT.
Diversification Opportunities for G8 EDUCATION and OSRAM LICHT
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 3EAG and OSRAM is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding G8 EDUCATION and OSRAM LICHT N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSRAM LICHT N and G8 EDUCATION 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 G8 EDUCATION are associated (or correlated) with OSRAM LICHT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSRAM LICHT N has no effect on the direction of G8 EDUCATION i.e., G8 EDUCATION and OSRAM LICHT go up and down completely randomly.
Pair Corralation between G8 EDUCATION and OSRAM LICHT
Assuming the 90 days trading horizon G8 EDUCATION is expected to under-perform the OSRAM LICHT. In addition to that, G8 EDUCATION is 4.6 times more volatile than OSRAM LICHT N. It trades about -0.08 of its total potential returns per unit of risk. OSRAM LICHT N is currently generating about 0.13 per unit of volatility. If you would invest 5,120 in OSRAM LICHT N on September 24, 2024 and sell it today you would earn a total of 40.00 from holding OSRAM LICHT N or generate 0.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
G8 EDUCATION vs. OSRAM LICHT N
Performance |
Timeline |
G8 EDUCATION |
OSRAM LICHT N |
G8 EDUCATION and OSRAM LICHT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with G8 EDUCATION and OSRAM LICHT
The main advantage of trading using opposite G8 EDUCATION and OSRAM LICHT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G8 EDUCATION position performs unexpectedly, OSRAM LICHT 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 OSRAM LICHT will offset losses from the drop in OSRAM LICHT's long position.G8 EDUCATION vs. Apple Inc | G8 EDUCATION vs. Apple Inc | G8 EDUCATION vs. Apple Inc | G8 EDUCATION vs. Microsoft |
OSRAM LICHT vs. EEDUCATION ALBERT AB | OSRAM LICHT vs. G8 EDUCATION | OSRAM LICHT vs. DeVry Education Group | OSRAM LICHT vs. Jacquet Metal Service |
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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