Correlation Between SGL CARBON and MUEHLHAN O

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

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

Diversification Opportunities for SGL CARBON and MUEHLHAN O

0.0
  Correlation Coefficient
SGL CARBON SE
MUEHLHAN O N

Pay attention - limited upside

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

Pair Corralation between SGL CARBON and MUEHLHAN O

If you would invest  0.00  in MUEHLHAN O N on May 1, 2021 and sell it today you would earn a total of  0.00  from holding MUEHLHAN O N or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SGL CARBON SE O N  vs.  MUEHLHAN O N

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

SGL CARBON and MUEHLHAN O Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with SGL CARBON and MUEHLHAN O

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

MUEHLHAN O N

Pair trading matchups for MUEHLHAN O

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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against MUEHLHAN O as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. MUEHLHAN O's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, MUEHLHAN O's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to MUEHLHAN O N.
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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