Correlation Between H2O Retailing and Semperit Aktiengesellscha

Can any of the company-specific risk be diversified away by investing in both H2O Retailing and Semperit Aktiengesellscha 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 H2O Retailing and Semperit Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between H2O Retailing and Semperit Aktiengesellschaft Holding, you can compare the effects of market volatilities on H2O Retailing and Semperit Aktiengesellscha 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 H2O Retailing with a short position of Semperit Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of H2O Retailing and Semperit Aktiengesellscha.

Diversification Opportunities for H2O Retailing and Semperit Aktiengesellscha

0.67

Correlation Coefficient

H2O Retailing  Semperit Aktiengesellscha

Poor diversification

The 3 months correlation between H2O and Semperit is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding H2O Retailing and Semperit Aktiengesellschaft Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semperit Aktiengesellscha and H2O Retailing 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 H2O Retailing are associated (or correlated) with Semperit Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semperit Aktiengesellscha has no effect on the direction of H2O Retailing i.e., H2O Retailing and Semperit Aktiengesellscha go up and down completely randomly.

Pair Corralation between H2O Retailing and Semperit Aktiengesellscha

Assuming the 90 days horizon H2O Retailing is expected to generate 25.36 times less return on investment than Semperit Aktiengesellscha. In addition to that, H2O Retailing is 2.02 times more volatile than Semperit Aktiengesellschaft Holding. It trades about 0.01 of its total potential returns per unit of risk. Semperit Aktiengesellschaft Holding is currently generating about 0.46 per unit of volatility. If you would invest  1,162  in Semperit Aktiengesellschaft Holding on October 10, 2024 and sell it today you would earn a total of  96.00  from holding Semperit Aktiengesellschaft Holding or generate 8.26% return on investment over 90 days.

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

H2O Retailing  vs.  Semperit Aktiengesellschaft Ho

H2O Retailing

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in H2O Retailing are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, H2O Retailing may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Semperit Aktiengesellscha

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Semperit Aktiengesellschaft Holding are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Semperit Aktiengesellscha may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with H2O Retailing and Semperit Aktiengesellscha

The main advantage of trading using opposite H2O Retailing and Semperit Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H2O Retailing position performs unexpectedly, Semperit Aktiengesellscha 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 Semperit Aktiengesellscha will offset losses from the drop in Semperit Aktiengesellscha's long position.

The idea behind H2O Retailing and Semperit Aktiengesellschaft Holding 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.