Correlation Between Mechanics Bank and Dürr Aktiengesellscha

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Can any of the company-specific risk be diversified away by investing in both Mechanics Bank and Dürr 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 Mechanics Bank and Dürr Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mechanics Bank and Drr Aktiengesellschaft, you can compare the effects of market volatilities on Mechanics Bank and Dürr 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 Mechanics Bank with a short position of Dürr Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mechanics Bank and Dürr Aktiengesellscha.

Diversification Opportunities for Mechanics Bank and Dürr Aktiengesellscha

-0.21
  Correlation Coefficient

Very good diversification

The 3 months correlation between Mechanics and Dürr is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mechanics Bank and Drr Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Drr Aktiengesellschaft and Mechanics Bank 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 Mechanics Bank are associated (or correlated) with Dürr Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Drr Aktiengesellschaft has no effect on the direction of Mechanics Bank i.e., Mechanics Bank and Dürr Aktiengesellscha go up and down completely randomly.

Pair Corralation between Mechanics Bank and Dürr Aktiengesellscha

If you would invest  1,985  in Drr Aktiengesellschaft on September 7, 2024 and sell it today you would earn a total of  427.00  from holding Drr Aktiengesellschaft or generate 21.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy1.56%
ValuesDaily Returns

Mechanics Bank  vs.  Drr Aktiengesellschaft

 Performance 
       Timeline  
Mechanics Bank 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mechanics Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical indicators, Mechanics Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Drr Aktiengesellschaft 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Drr Aktiengesellschaft are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Dürr Aktiengesellscha reported solid returns over the last few months and may actually be approaching a breakup point.

Mechanics Bank and Dürr Aktiengesellscha Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mechanics Bank and Dürr Aktiengesellscha

The main advantage of trading using opposite Mechanics Bank and Dürr Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mechanics Bank position performs unexpectedly, Dürr 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 Dürr Aktiengesellscha will offset losses from the drop in Dürr Aktiengesellscha's long position.
The idea behind Mechanics Bank and Drr Aktiengesellschaft 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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