Correlation Between BASF SE and EVONIK INDUSTRIES

By analyzing existing cross correlation between BASF SE NA and EVONIK INDUSTRIES NA, you can compare the effects of market volatilities on BASF SE and EVONIK INDUSTRIES 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 EVONIK INDUSTRIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of BASF SE and EVONIK INDUSTRIES.

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

Diversification Opportunities for BASF SE and EVONIK INDUSTRIES

0.0
  Correlation Coefficient
BASF SE NA
EVONIK INDUSTRIES

Pay attention - limited upside

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

Pair Corralation between BASF SE and EVONIK INDUSTRIES

If you would invest  6,683  in BASF SE NA on April 30, 2021 and sell it today you would earn a total of  25.00  from holding BASF SE NA or generate 0.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

BASF SE NA O N  vs.  EVONIK INDUSTRIES NA 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

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

BASF SE and EVONIK INDUSTRIES Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with BASF SE and EVONIK INDUSTRIES

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

EVONIK INDUSTRIES NA

Pair trading matchups for EVONIK INDUSTRIES

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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