Correlation Between EVONIK INDUSTRIES and BASF SE

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

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

Diversification Opportunities for EVONIK INDUSTRIES and BASF SE

0.0
  Correlation Coefficient
EVONIK INDUSTRIES
BASF SE NA

Pay attention - limited upside

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

Pair Corralation between EVONIK INDUSTRIES and BASF SE

If you would invest (100.00)  in EVONIK INDUSTRIES NA on May 3, 2021 and sell it today you would earn a total of  100.00  from holding EVONIK INDUSTRIES NA or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

EVONIK INDUSTRIES NA O N  vs.  BASF SE NA O N

 Performance (%) 
      Timeline 
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 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 and BASF SE Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with EVONIK INDUSTRIES and BASF SE

The main advantage of trading using opposite EVONIK INDUSTRIES and BASF SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVONIK INDUSTRIES position performs unexpectedly, BASF SE 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 BASF SE will offset losses from the drop in BASF SE's long position.
The idea behind EVONIK INDUSTRIES NA and BASF SE 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.
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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