Correlation Between Volkswagen and Coloplast
Can any of the company-specific risk be diversified away by investing in both Volkswagen and Coloplast 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 Volkswagen and Coloplast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG and Coloplast A, you can compare the effects of market volatilities on Volkswagen and Coloplast 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 Volkswagen with a short position of Coloplast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Coloplast.
Diversification Opportunities for Volkswagen and Coloplast
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Volkswagen and Coloplast is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG and Coloplast A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloplast A and Volkswagen 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 Volkswagen AG are associated (or correlated) with Coloplast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloplast A has no effect on the direction of Volkswagen i.e., Volkswagen and Coloplast go up and down completely randomly.
Pair Corralation between Volkswagen and Coloplast
Assuming the 90 days horizon Volkswagen AG is expected to generate 1.51 times more return on investment than Coloplast. However, Volkswagen is 1.51 times more volatile than Coloplast A. It trades about 0.1 of its potential returns per unit of risk. Coloplast A is currently generating about 0.02 per unit of risk. If you would invest 10,800 in Volkswagen AG on June 12, 2025 and sell it today you would earn a total of 1,381 from holding Volkswagen AG or generate 12.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volkswagen AG vs. Coloplast A
Performance |
| Timeline |
| Volkswagen AG |
| Coloplast A |
Volkswagen and Coloplast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Coloplast
The main advantage of trading using opposite Volkswagen and Coloplast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, Coloplast 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 Coloplast will offset losses from the drop in Coloplast's long position.| Volkswagen vs. Volkswagen AG VZO | Volkswagen vs. Volkswagen AG Pref | Volkswagen vs. Mercedes Benz Group AG | Volkswagen vs. Honda Motor Co |
| Coloplast vs. Straumann Holding AG | Coloplast vs. Hoya Corp | Coloplast vs. EssilorLuxottica Socit anonyme | Coloplast vs. Essilor International SA |
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 the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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