Correlation Between MUEHLHAN O and COVESTRO

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

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

Diversification Opportunities for MUEHLHAN O and COVESTRO

0.0
  Correlation Coefficient
MUEHLHAN O N
COVESTRO AG O

Pay attention - limited upside

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

Pair Corralation between MUEHLHAN O and COVESTRO

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

MUEHLHAN O N  vs.  COVESTRO AG O N

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

MUEHLHAN O and COVESTRO Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with MUEHLHAN O and COVESTRO

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

MUEHLHAN O N

Pair trading matchups for MUEHLHAN O

The idea behind MUEHLHAN O N and COVESTRO AG 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.

COVESTRO AG O

Pair trading matchups for COVESTRO

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 Transaction History module to view history of all your transactions and understand their impact on performance.

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