Correlation Between GRENKELEASING Dusseldorf and CHINA EAST

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

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

Diversification Opportunities for GRENKELEASING Dusseldorf and CHINA EAST

0.02

Correlation Coefficient

GRENKELEASING Dusseldorf  CHINA EAST

Significant diversification

The 3 months correlation between GRENKELEASING and CHINA is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding GRENKELEASING Dusseldorf and CHINA EAST ED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EAST ED and GRENKELEASING Dusseldorf 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 CHINA EAST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EAST ED has no effect on the direction of GRENKELEASING Dusseldorf i.e., GRENKELEASING Dusseldorf and CHINA EAST go up and down completely randomly.

Pair Corralation between GRENKELEASING Dusseldorf and CHINA EAST

Assuming the 90 days trading horizon GRENKELEASING Dusseldorf is expected to under-perform the CHINA EAST. In addition to that, GRENKELEASING Dusseldorf is 1.65 times more volatile than CHINA EAST ED. It trades about -0.18 of its total potential returns per unit of risk. CHINA EAST ED is currently generating about -0.06 per unit of volatility. If you would invest  33.00  in CHINA EAST ED on October 26, 2024 and sell it today you would lose (3.00) from holding CHINA EAST ED or give up 9.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

GRENKELEASING Dusseldorf  vs.  CHINA EAST ED

GRENKELEASING Dusseldorf

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 unsteady 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.

CHINA EAST ED

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHINA EAST ED has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with GRENKELEASING Dusseldorf and CHINA EAST

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

The idea behind GRENKELEASING Dusseldorf and CHINA EAST ED 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.