Correlation Between EVONIK INDUSTRIES and LANXESS AG

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

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

Diversification Opportunities for EVONIK INDUSTRIES and LANXESS AG

0.0
  Correlation Coefficient
EVONIK INDUSTRIES
LANXESS AG

Pay attention - limited upside

The 3 months correlation between EVONIK and LANXESS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EVONIK INDUSTRIES NA O N and LANXESS AG in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on LANXESS AG 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 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 EVONIK INDUSTRIES i.e., EVONIK INDUSTRIES and LANXESS AG go up and down completely randomly.

Pair Corralation between EVONIK INDUSTRIES and LANXESS AG

If you would invest (100.00)  in LANXESS AG on May 3, 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

EVONIK INDUSTRIES NA O N  vs.  LANXESS AG

 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.
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.

EVONIK INDUSTRIES and LANXESS AG Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with EVONIK INDUSTRIES and LANXESS AG

The main advantage of trading using opposite EVONIK INDUSTRIES and LANXESS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVONIK INDUSTRIES 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 EVONIK INDUSTRIES NA 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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