Correlation Between GRENKELEASING and Fortune Brands

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

By analyzing existing cross correlation between GRENKELEASING Dusseldorf and Fortune Brands Home, you can compare the effects of market volatilities on GRENKELEASING and Fortune Brands 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 GRENKELEASING with a short position of Fortune Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRENKELEASING and Fortune Brands.

Diversification Opportunities for GRENKELEASING and Fortune Brands

0.83

Correlation Coefficient

GRENKELEASING  Fortune Brands

Very poor diversification

The 3 months correlation between GRENKELEASING and Fortune is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding GRENKELEASING Dusseldorf and Fortune Brands Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Brands Home and GRENKELEASING 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 GRENKELEASING Dusseldorf are associated (or correlated) with Fortune Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Brands Home has no effect on the direction of GRENKELEASING i.e., GRENKELEASING and Fortune Brands go up and down completely randomly.

Pair Corralation between GRENKELEASING and Fortune Brands

Assuming the 90 days trading horizon GRENKELEASING Dusseldorf is expected to under-perform the Fortune Brands. In addition to that, GRENKELEASING is 1.27 times more volatile than Fortune Brands Home. It trades about -0.02 of its total potential returns per unit of risk. Fortune Brands Home is currently generating about 0.03 per unit of volatility. If you would invest  5,341  in Fortune Brands Home on October 11, 2024 and sell it today you would earn a total of  1,209  from holding Fortune Brands Home or generate 22.64% return on investment over 90 days.

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

GRENKELEASING Dusseldorf  vs.  Fortune Brands Home

GRENKELEASING Duss

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRENKELEASING Dusseldorf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward-looking indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Fortune Brands Home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fortune Brands Home 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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with GRENKELEASING and Fortune Brands

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

The idea behind GRENKELEASING Dusseldorf and Fortune Brands Home 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.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.