Correlation Between Select STOXX and 172967NU1

Can any of the company-specific risk be diversified away by investing in both Select STOXX and 172967NU1 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 Select STOXX and 172967NU1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Select STOXX Europe and C 491 24 MAY 33, you can compare the effects of market volatilities on Select STOXX and 172967NU1 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 Select STOXX with a short position of 172967NU1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select STOXX and 172967NU1.

Diversification Opportunities for Select STOXX and 172967NU1

0.0

Correlation Coefficient

Select STOXX  172967NU1

Pay attention - limited upside

The 3 months correlation between Select and 172967NU1 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Select STOXX Europe and C 491 24 MAY 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 172967NU1 and Select STOXX 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 Select STOXX Europe are associated (or correlated) with 172967NU1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 172967NU1 has no effect on the direction of Select STOXX i.e., Select STOXX and 172967NU1 go up and down completely randomly.

Pair Corralation between Select STOXX and 172967NU1

If you would invest  2,485  in Select STOXX Europe on January 8, 2025 and sell it today you would earn a total of  478.00  from holding Select STOXX Europe or generate 19.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Select STOXX Europe  vs.  C 491 24 MAY 33

Select STOXX Europe

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Select STOXX Europe are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Select STOXX exhibited solid returns over the last few months and may actually be approaching a breakup point.

172967NU1

Risk-Adjusted Performance

Very Weak

Over the last 90 days C 491 24 MAY 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 172967NU1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Select STOXX and 172967NU1

The main advantage of trading using opposite Select STOXX and 172967NU1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select STOXX position performs unexpectedly, 172967NU1 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 172967NU1 will offset losses from the drop in 172967NU1's long position.

The idea behind Select STOXX Europe and C 491 24 MAY 33 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.