Correlation Between WACKER CHEMIE and COVESTRO

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

Specify exactly 2 symbols:

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

Diversification Opportunities for WACKER CHEMIE and COVESTRO

0.0
  Correlation Coefficient
WACKER CHEMIE O
COVESTRO AG O

Pay attention - limited upside

The 3 months correlation between WACKER and COVESTRO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WACKER CHEMIE 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 WACKER CHEMIE 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 WACKER CHEMIE O 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 WACKER CHEMIE i.e., WACKER CHEMIE and COVESTRO go up and down completely randomly.

Pair Corralation between WACKER CHEMIE and COVESTRO

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

WACKER CHEMIE O N  vs.  COVESTRO AG O N

 Performance (%) 
      Timeline 
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.
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.

WACKER CHEMIE and COVESTRO Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with WACKER CHEMIE and COVESTRO

The main advantage of trading using opposite WACKER CHEMIE and COVESTRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WACKER CHEMIE 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.
The idea behind WACKER CHEMIE O 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.
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 Anywhere module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Transaction History
View history of all your transactions and understand their impact on performance
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go