Correlation Between Mercedes Benz and Honda
Can any of the company-specific risk be diversified away by investing in both Mercedes Benz and Honda 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 Mercedes Benz and Honda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercedes Benz Group and Honda Motor Co, you can compare the effects of market volatilities on Mercedes Benz and Honda 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 Mercedes Benz with a short position of Honda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercedes Benz and Honda.
Diversification Opportunities for Mercedes Benz and Honda
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mercedes and Honda is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mercedes Benz Group and Honda Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honda Motor and Mercedes Benz 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 Mercedes Benz Group are associated (or correlated) with Honda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honda Motor has no effect on the direction of Mercedes Benz i.e., Mercedes Benz and Honda go up and down completely randomly.
Pair Corralation between Mercedes Benz and Honda
If you would invest (100.00) in Mercedes Benz Group on February 1, 2024 and sell it today you would earn a total of 100.00 from holding Mercedes Benz Group or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Mercedes Benz Group vs. Honda Motor Co
Performance |
Timeline |
Mercedes Benz Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Honda Motor |
Mercedes Benz and Honda Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mercedes Benz and Honda
The main advantage of trading using opposite Mercedes Benz and Honda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercedes Benz position performs unexpectedly, Honda 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 Honda will offset losses from the drop in Honda's long position.Mercedes Benz vs. LanzaTech Global | Mercedes Benz vs. Falcon Metals Limited | Mercedes Benz vs. GAMCO Global Gold | Mercedes Benz vs. SEI Investments |
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.
Other Complementary Tools
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation |