Correlation Between BASF SE and COVESTRO

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

Specify exactly 2 symbols:

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

Diversification Opportunities for BASF SE and COVESTRO

0.0
  Correlation Coefficient
BASF SE NA
COVESTRO AG O

Pay attention - limited upside

The 3 months correlation between BASF SE and COVESTRO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BASF SE NA O N and COVESTRO AG O N in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on COVESTRO AG O and BASF SE 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 BASF SE NA are associated (or correlated) with COVESTRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVESTRO AG O has no effect on the direction of BASF SE i.e., BASF SE and COVESTRO go up and down completely randomly.

Pair Corralation between BASF SE and COVESTRO

If you would invest  5,061  in BASF SE NA on May 3, 2021 and sell it today you would earn a total of  1,561  from holding BASF SE NA or generate 30.84% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

BASF SE NA O N  vs.  COVESTRO AG O N

 Performance (%) 
      Timeline 
BASF SE NA 
 BASF SE Performance
0 of 100
Over the last 90 days BASF SE NA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BASF SE is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

BASF SE Price Channel

COVESTRO AG O 
 COVESTRO Performance
0 of 100
Over the last 90 days COVESTRO AG O has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, COVESTRO is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

BASF SE and COVESTRO Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with BASF SE and COVESTRO

The main advantage of trading using opposite BASF SE and COVESTRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BASF SE position performs unexpectedly, COVESTRO 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 COVESTRO will offset losses from the drop in COVESTRO's long position.
The idea behind BASF SE NA and COVESTRO AG O 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.
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

Other Complementary Tools

Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go