Correlation Between Fielmann Aktiengesellscha and CARSALES

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

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

Diversification Opportunities for Fielmann Aktiengesellscha and CARSALES

-0.68

Correlation Coefficient

Fielmann Aktiengesellscha  CARSALES

Excellent diversification

The 3 months correlation between Fielmann and CARSALES is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fielmann Aktiengesellschaft and CARSALESCOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARSALESCOM and Fielmann 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 Fielmann Aktiengesellschaft are associated (or correlated) with CARSALES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARSALESCOM has no effect on the direction of Fielmann Aktiengesellscha i.e., Fielmann Aktiengesellscha and CARSALES go up and down completely randomly.

Pair Corralation between Fielmann Aktiengesellscha and CARSALES

Assuming the 90 days trading horizon Fielmann Aktiengesellscha is expected to generate 2.75 times less return on investment than CARSALES. But when comparing it to its historical volatility, Fielmann Aktiengesellschaft is 1.26 times less risky than CARSALES. It trades about 0.03 of its potential returns per unit of risk. CARSALESCOM is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,329  in CARSALESCOM on October 4, 2024 and sell it today you would earn a total of  851.00  from holding CARSALESCOM or generate 64.03% return on investment over 90 days.

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

Fielmann Aktiengesellschaft  vs.  CARSALESCOM

Fielmann Aktiengesellscha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fielmann Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

CARSALESCOM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CARSALESCOM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, CARSALES is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fielmann Aktiengesellscha and CARSALES

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

The idea behind Fielmann Aktiengesellschaft and CARSALESCOM 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 CEOs Directory module to screen CEOs from public companies around the world.