Correlation Between Borussia Dortmund and Meta Platforms
Can any of the company-specific risk be diversified away by investing in both Borussia Dortmund and Meta Platforms 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 Borussia Dortmund and Meta Platforms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Borussia Dortmund GmbH and Meta Platforms, you can compare the effects of market volatilities on Borussia Dortmund and Meta Platforms 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 Borussia Dortmund with a short position of Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borussia Dortmund and Meta Platforms.
Diversification Opportunities for Borussia Dortmund and Meta Platforms
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Borussia and Meta is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Borussia Dortmund GmbH and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms and Borussia Dortmund 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 Borussia Dortmund GmbH are associated (or correlated) with Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of Borussia Dortmund i.e., Borussia Dortmund and Meta Platforms go up and down completely randomly.
Pair Corralation between Borussia Dortmund and Meta Platforms
Assuming the 90 days trading horizon Borussia Dortmund GmbH is expected to generate 1.0 times more return on investment than Meta Platforms. However, Borussia Dortmund GmbH is 1.0 times less risky than Meta Platforms. It trades about 0.31 of its potential returns per unit of risk. Meta Platforms is currently generating about 0.02 per unit of risk. If you would invest 335.00 in Borussia Dortmund GmbH on January 26, 2024 and sell it today you would earn a total of 39.00 from holding Borussia Dortmund GmbH or generate 11.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Borussia Dortmund GmbH vs. Meta Platforms
Performance |
| Timeline |
| Borussia Dortmund GmbH |
| Meta Platforms |
Borussia Dortmund and Meta Platforms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Borussia Dortmund and Meta Platforms
The main advantage of trading using opposite Borussia Dortmund and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Borussia Dortmund position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.| Borussia Dortmund vs. Eastman Chemical | Borussia Dortmund vs. UNIVMUSIC GRPADR050 | Borussia Dortmund vs. TIANDE CHEMICAL | Borussia Dortmund vs. Darden Restaurants |
Check out your portfolio center.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.
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