Correlation Between Varta AG and TRADEDOUBLER

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

By analyzing existing cross correlation between Varta AG and TRADEDOUBLER AB SK, you can compare the effects of market volatilities on Varta AG and TRADEDOUBLER 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 Varta AG with a short position of TRADEDOUBLER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Varta AG and TRADEDOUBLER.

Diversification Opportunities for Varta AG and TRADEDOUBLER

-0.49

Correlation Coefficient

Varta AG  TRADEDOUBLER

Very good diversification

The 3 months correlation between Varta and TRADEDOUBLER is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Varta AG and TRADEDOUBLER AB SK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEDOUBLER AB SK and Varta AG 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 Varta AG are associated (or correlated) with TRADEDOUBLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEDOUBLER AB SK has no effect on the direction of Varta AG i.e., Varta AG and TRADEDOUBLER go up and down completely randomly.

Pair Corralation between Varta AG and TRADEDOUBLER

Assuming the 90 days trading horizon Varta AG is expected to generate 281.06 times less return on investment than TRADEDOUBLER. In addition to that, Varta AG is 1.71 times more volatile than TRADEDOUBLER AB SK. It trades about 0.0 of its total potential returns per unit of risk. TRADEDOUBLER AB SK is currently generating about 0.19 per unit of volatility. If you would invest  27.00  in TRADEDOUBLER AB SK on October 22, 2024 and sell it today you would earn a total of  2.00  from holding TRADEDOUBLER AB SK or generate 7.41% return on investment over 90 days.

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

Varta AG  vs.  TRADEDOUBLER AB SK

Varta AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Varta AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

TRADEDOUBLER AB SK

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TRADEDOUBLER AB SK are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRADEDOUBLER may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Varta AG and TRADEDOUBLER

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

The idea behind Varta AG and TRADEDOUBLER AB SK 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.