Correlation Between Intercontinental and Deutsche Brse
Can any of the company-specific risk be diversified away by investing in both Intercontinental and Deutsche Brse 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 Intercontinental and Deutsche Brse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intercontinental Exchange and Deutsche Brse AG, you can compare the effects of market volatilities on Intercontinental and Deutsche Brse 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 Intercontinental with a short position of Deutsche Brse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intercontinental and Deutsche Brse.
Diversification Opportunities for Intercontinental and Deutsche Brse
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Intercontinental and Deutsche is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Intercontinental Exchange and Deutsche Brse AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Brse AG and Intercontinental 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 Intercontinental Exchange are associated (or correlated) with Deutsche Brse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Brse AG has no effect on the direction of Intercontinental i.e., Intercontinental and Deutsche Brse go up and down completely randomly.
Pair Corralation between Intercontinental and Deutsche Brse
Considering the 90-day investment horizon Intercontinental Exchange is expected to generate 0.79 times more return on investment than Deutsche Brse. However, Intercontinental Exchange is 1.26 times less risky than Deutsche Brse. It trades about 0.2 of its potential returns per unit of risk. Deutsche Brse AG is currently generating about 0.13 per unit of risk. If you would invest 10,401 in Intercontinental Exchange on January 25, 2024 and sell it today you would earn a total of 2,856 from holding Intercontinental Exchange or generate 27.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intercontinental Exchange vs. Deutsche Brse AG
Performance |
| Timeline |
| Intercontinental Exchange |
| Deutsche Brse AG |
Intercontinental and Deutsche Brse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intercontinental and Deutsche Brse
The main advantage of trading using opposite Intercontinental and Deutsche Brse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intercontinental position performs unexpectedly, Deutsche Brse 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 Deutsche Brse will offset losses from the drop in Deutsche Brse's long position.| Intercontinental vs. SP Global | Intercontinental vs. Moodys | Intercontinental vs. MSCI Inc | Intercontinental vs. FactSet Research Systems |
| Deutsche Brse vs. TMX Group Limited | Deutsche Brse vs. Otc Markets Group | Deutsche Brse vs. Morningstar | Deutsche Brse vs. CME Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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