Correlation Between CROPENERGIES and WACKER CHEMIE

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

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

Diversification Opportunities for CROPENERGIES and WACKER CHEMIE

0.0
  Correlation Coefficient
CROPENERGIES AG
WACKER CHEMIE O

Pay attention - limited upside

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

Pair Corralation between CROPENERGIES and WACKER CHEMIE

If you would invest (100.00)  in WACKER CHEMIE O on April 27, 2021 and sell it today you would earn a total of  100.00  from holding WACKER CHEMIE O or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CROPENERGIES AG  vs.  WACKER CHEMIE O N

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

CROPENERGIES and WACKER CHEMIE Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with CROPENERGIES and WACKER CHEMIE

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

CROPENERGIES AG

Pair trading matchups for CROPENERGIES

The idea behind CROPENERGIES AG and WACKER CHEMIE 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.

WACKER CHEMIE O

Pair trading matchups for WACKER CHEMIE

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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