Correlation Between Mercedes Benz and Fiat Chrysler
Can any of the company-specific risk be diversified away by investing in both Mercedes Benz and Fiat Chrysler 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 Mercedes Benz and Fiat Chrysler into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercedes Benz Group and Fiat Chrysler Automobiles, you can compare the effects of market volatilities on Mercedes Benz and Fiat Chrysler 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 Mercedes Benz with a short position of Fiat Chrysler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercedes Benz and Fiat Chrysler.
Diversification Opportunities for Mercedes Benz and Fiat Chrysler
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mercedes and Fiat is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mercedes Benz Group and Fiat Chrysler Automobiles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiat Chrysler Automobiles and Mercedes Benz 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 Mercedes Benz Group are associated (or correlated) with Fiat Chrysler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiat Chrysler Automobiles has no effect on the direction of Mercedes Benz i.e., Mercedes Benz and Fiat Chrysler go up and down completely randomly.
Pair Corralation between Mercedes Benz and Fiat Chrysler
If you would invest (100.00) in Fiat Chrysler Automobiles on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Fiat Chrysler Automobiles or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercedes Benz Group vs. Fiat Chrysler Automobiles
Performance |
| Timeline |
| Mercedes Benz Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fiat Chrysler Automobiles |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Mercedes Benz and Fiat Chrysler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercedes Benz and Fiat Chrysler
The main advantage of trading using opposite Mercedes Benz and Fiat Chrysler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercedes Benz position performs unexpectedly, Fiat Chrysler 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 Fiat Chrysler will offset losses from the drop in Fiat Chrysler's long position.| Mercedes Benz vs. Ziff Davis | Mercedes Benz vs. Pinterest | Mercedes Benz vs. United Microelectronics | Mercedes Benz vs. Iridium Communications |
| Fiat Chrysler vs. Zhihu Inc ADR | Fiat Chrysler vs. Bm Technologies | Fiat Chrysler vs. Cadence Design Systems | Fiat Chrysler vs. Getty Images Holdings |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Global Correlations Find global opportunities by holding instruments from different markets |