Correlation Between CROPENERGIES and LANXESS AG

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

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

Diversification Opportunities for CROPENERGIES and LANXESS AG

0.0
  Correlation Coefficient
CROPENERGIES AG
LANXESS AG

Pay attention - limited upside

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

Pair Corralation between CROPENERGIES and LANXESS AG

If you would invest (100.00)  in LANXESS AG on April 30, 2021 and sell it today you would earn a total of  100.00  from holding LANXESS AG or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CROPENERGIES AG  vs.  LANXESS AG

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

CROPENERGIES and LANXESS AG Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with CROPENERGIES and LANXESS AG

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

LANXESS AG

Pair trading matchups for LANXESS AG

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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