Correlation Between Deutsche Lufthansa and Budapesti Ingatlan

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

By analyzing existing cross correlation between Deutsche Lufthansa AG and Budapesti Ingatlan Hasznositasi, you can compare the effects of market volatilities on Deutsche Lufthansa and Budapesti Ingatlan 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 Deutsche Lufthansa with a short position of Budapesti Ingatlan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Lufthansa and Budapesti Ingatlan.

Diversification Opportunities for Deutsche Lufthansa and Budapesti Ingatlan

0.03

Correlation Coefficient

Deutsche Lufthansa  Budapesti Ingatlan

Significant diversification

The 3 months correlation between Deutsche and Budapesti is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Lufthansa AG and Budapesti Ingatlan Hasznositas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Budapesti Ingatlan and Deutsche Lufthansa 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 Deutsche Lufthansa AG are associated (or correlated) with Budapesti Ingatlan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Budapesti Ingatlan has no effect on the direction of Deutsche Lufthansa i.e., Deutsche Lufthansa and Budapesti Ingatlan go up and down completely randomly.

Pair Corralation between Deutsche Lufthansa and Budapesti Ingatlan

If you would invest (100.00) in Deutsche Lufthansa AG on December 4, 2024 and sell it today you would earn a total of  100.00  from holding Deutsche Lufthansa AG or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Deutsche Lufthansa AG  vs.  Budapesti Ingatlan Hasznositas

Deutsche Lufthansa

Risk-Adjusted Performance

Weak

Over the last 90 days Deutsche Lufthansa AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Deutsche Lufthansa is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Budapesti Ingatlan

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Budapesti Ingatlan Hasznositasi are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Budapesti Ingatlan is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Deutsche Lufthansa and Budapesti Ingatlan

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

The idea behind Deutsche Lufthansa AG and Budapesti Ingatlan Hasznositasi 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.