Correlation Between Volkswagen and GEVORKYAN

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

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

Diversification Opportunities for Volkswagen and GEVORKYAN

-0.54

Correlation Coefficient

Volkswagen  GEVORKYAN

Excellent diversification

The 3 months correlation between Volkswagen and GEVORKYAN is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG and GEVORKYAN as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEVORKYAN as and Volkswagen 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 Volkswagen AG are associated (or correlated) with GEVORKYAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEVORKYAN as has no effect on the direction of Volkswagen i.e., Volkswagen and GEVORKYAN go up and down completely randomly.

Pair Corralation between Volkswagen and GEVORKYAN

Assuming the 90 days trading horizon Volkswagen AG is expected to generate 2.87 times more return on investment than GEVORKYAN. However, Volkswagen is 2.87 times more volatile than GEVORKYAN as. It trades about 0.18 of its potential returns per unit of risk. GEVORKYAN as is currently generating about -0.13 per unit of risk. If you would invest  208,350  in Volkswagen AG on December 1, 2024 and sell it today you would earn a total of  57,550  from holding Volkswagen AG or generate 27.62% return on investment over 90 days.

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

Volkswagen AG  vs.  GEVORKYAN as

Volkswagen AG

Risk-Adjusted Performance

Good

Over the last 90 days Volkswagen AG has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Volkswagen reported solid returns over the last few months and may actually be approaching a breakup point.

GEVORKYAN as

Risk-Adjusted Performance

Very Weak

Over the last 90 days GEVORKYAN as has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Volkswagen and GEVORKYAN

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

The idea behind Volkswagen AG and GEVORKYAN as 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.