Correlation Between Volkswagen and Reit 1
Can any of the company-specific risk be diversified away by investing in both Volkswagen and Reit 1 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 Reit 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG and Reit 1, you can compare the effects of market volatilities on Volkswagen and Reit 1 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 Reit 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Reit 1.
Diversification Opportunities for Volkswagen and Reit 1
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Volkswagen and Reit is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG and Reit 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reit 1 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 Reit 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reit 1 has no effect on the direction of Volkswagen i.e., Volkswagen and Reit 1 go up and down completely randomly.
Pair Corralation between Volkswagen and Reit 1
Assuming the 90 days horizon Volkswagen is expected to generate 7.97 times less return on investment than Reit 1. In addition to that, Volkswagen is 1.75 times more volatile than Reit 1. It trades about 0.01 of its total potential returns per unit of risk. Reit 1 is currently generating about 0.13 per unit of volatility. If you would invest 700.00 in Reit 1 on September 5, 2025 and sell it today you would earn a total of 64.00 from holding Reit 1 or generate 9.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volkswagen AG vs. Reit 1
Performance |
| Timeline |
| Volkswagen AG |
| Reit 1 |
Volkswagen and Reit 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Reit 1
The main advantage of trading using opposite Volkswagen and Reit 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, Reit 1 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 Reit 1 will offset losses from the drop in Reit 1's long position.| Volkswagen vs. Sterling Construction | Volkswagen vs. American Medical Technologies | Volkswagen vs. Granite Construction Incorporated | Volkswagen vs. Journey Medical Corp |
| Reit 1 vs. Atrium Mortgage Investment | Reit 1 vs. Guangdong Investment Limited | Reit 1 vs. Wah Fu Education | Reit 1 vs. Puhui Wealth 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 the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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