Correlation Between INTERSHOP Communications and GRENKELEASING Dusseldorf

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

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

Diversification Opportunities for INTERSHOP Communications and GRENKELEASING Dusseldorf

-0.12

Correlation Coefficient

INTERSHOP Communications  GRENKELEASING Dusseldorf

Good diversification

The 3 months correlation between INTERSHOP and GRENKELEASING is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding INTERSHOP Communications Aktie and GRENKELEASING Dusseldorf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRENKELEASING Dusseldorf and INTERSHOP Communications 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 INTERSHOP Communications Aktiengesellschaft are associated (or correlated) with GRENKELEASING Dusseldorf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRENKELEASING Dusseldorf has no effect on the direction of INTERSHOP Communications i.e., INTERSHOP Communications and GRENKELEASING Dusseldorf go up and down completely randomly.

Pair Corralation between INTERSHOP Communications and GRENKELEASING Dusseldorf

Assuming the 90 days trading horizon INTERSHOP Communications Aktiengesellschaft is expected to generate 0.54 times more return on investment than GRENKELEASING Dusseldorf. However, INTERSHOP Communications Aktiengesellschaft is 1.86 times less risky than GRENKELEASING Dusseldorf. It trades about -0.08 of its potential returns per unit of risk. GRENKELEASING Dusseldorf is currently generating about -0.18 per unit of risk. If you would invest  187.00  in INTERSHOP Communications Aktiengesellschaft on October 25, 2024 and sell it today you would lose (18.00) from holding INTERSHOP Communications Aktiengesellschaft or give up 9.63% of portfolio value over 90 days.

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

INTERSHOP Communications Aktie  vs.  GRENKELEASING Dusseldorf

INTERSHOP Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTERSHOP Communications Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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 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.

Pair Trading with INTERSHOP Communications and GRENKELEASING Dusseldorf

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

The idea behind INTERSHOP Communications Aktiengesellschaft and GRENKELEASING Dusseldorf 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.