Correlation Between Austriacard Holdings and N Leventeris
Can any of the company-specific risk be diversified away by investing in both Austriacard Holdings and N Leventeris 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 Austriacard Holdings and N Leventeris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austriacard Holdings AG and N Leventeris SA, you can compare the effects of market volatilities on Austriacard Holdings and N Leventeris 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 Austriacard Holdings with a short position of N Leventeris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austriacard Holdings and N Leventeris.
Diversification Opportunities for Austriacard Holdings and N Leventeris
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Austriacard and LEBEP is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Austriacard Holdings AG and N Leventeris SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Leventeris SA and Austriacard Holdings 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 Austriacard Holdings AG are associated (or correlated) with N Leventeris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Leventeris SA has no effect on the direction of Austriacard Holdings i.e., Austriacard Holdings and N Leventeris go up and down completely randomly.
Pair Corralation between Austriacard Holdings and N Leventeris
Assuming the 90 days trading horizon Austriacard Holdings AG is expected to generate 0.12 times more return on investment than N Leventeris. However, Austriacard Holdings AG is 8.07 times less risky than N Leventeris. It trades about -0.05 of its potential returns per unit of risk. N Leventeris SA is currently generating about -0.09 per unit of risk. If you would invest 550.00 in Austriacard Holdings AG on August 30, 2024 and sell it today you would lose (8.00) from holding Austriacard Holdings AG or give up 1.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austriacard Holdings AG vs. N Leventeris SA
Performance |
| Timeline |
| Austriacard Holdings |
| N Leventeris SA |
Austriacard Holdings and N Leventeris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austriacard Holdings and N Leventeris
The main advantage of trading using opposite Austriacard Holdings and N Leventeris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austriacard Holdings position performs unexpectedly, N Leventeris 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 N Leventeris will offset losses from the drop in N Leventeris' long position.The idea behind Austriacard Holdings AG and N Leventeris SA 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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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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