Correlation Between Continental Aktiengesellscha and Marketing Worldwide

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

By analyzing existing cross correlation between Continental Aktiengesellschaft and Marketing Worldwide, you can compare the effects of market volatilities on Continental Aktiengesellscha and Marketing Worldwide 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 Continental Aktiengesellscha with a short position of Marketing Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Aktiengesellscha and Marketing Worldwide.

Diversification Opportunities for Continental Aktiengesellscha and Marketing Worldwide

-0.45

Correlation Coefficient

Continental Aktiengesellscha  Marketing Worldwide

Very good diversification

The 3 months correlation between Continental and Marketing is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Continental Aktiengesellschaft and Marketing Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marketing Worldwide and Continental Aktiengesellscha 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 Continental Aktiengesellschaft are associated (or correlated) with Marketing Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marketing Worldwide has no effect on the direction of Continental Aktiengesellscha i.e., Continental Aktiengesellscha and Marketing Worldwide go up and down completely randomly.

Pair Corralation between Continental Aktiengesellscha and Marketing Worldwide

If you would invest  6,970  in Continental Aktiengesellschaft on December 4, 2024 and sell it today you would earn a total of  357.00  from holding Continental Aktiengesellschaft or generate 5.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Continental Aktiengesellschaft  vs.  Marketing Worldwide

Continental Aktiengesellscha

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Continental Aktiengesellschaft are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Continental Aktiengesellscha reported solid returns over the last few months and may actually be approaching a breakup point.

Marketing Worldwide

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marketing Worldwide are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Marketing Worldwide exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Continental Aktiengesellscha and Marketing Worldwide

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

The idea behind Continental Aktiengesellschaft and Marketing Worldwide 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.