Correlation Between Addiko Bank and BKS Bank
Can any of the company-specific risk be diversified away by investing in both Addiko Bank and BKS Bank 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 Addiko Bank and BKS Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addiko Bank AG and BKS Bank AG, you can compare the effects of market volatilities on Addiko Bank and BKS Bank 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 Addiko Bank with a short position of BKS Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addiko Bank and BKS Bank.
Diversification Opportunities for Addiko Bank and BKS Bank
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Addiko and BKS is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Addiko Bank AG and BKS Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKS Bank AG and Addiko Bank 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 Addiko Bank AG are associated (or correlated) with BKS Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKS Bank AG has no effect on the direction of Addiko Bank i.e., Addiko Bank and BKS Bank go up and down completely randomly.
Pair Corralation between Addiko Bank and BKS Bank
Assuming the 90 days trading horizon Addiko Bank AG is expected to under-perform the BKS Bank. But the stock apears to be less risky and, when comparing its historical volatility, Addiko Bank AG is 1.49 times less risky than BKS Bank. The stock trades about -0.19 of its potential returns per unit of risk. The BKS Bank AG is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 1,580 in BKS Bank AG on November 4, 2024 and sell it today you would lose (70.00) from holding BKS Bank AG or give up 4.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Addiko Bank AG vs. BKS Bank AG
Performance |
| Timeline |
| Addiko Bank AG |
| BKS Bank AG |
Addiko Bank and BKS Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addiko Bank and BKS Bank
The main advantage of trading using opposite Addiko Bank and BKS Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addiko Bank position performs unexpectedly, BKS Bank 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 BKS Bank will offset losses from the drop in BKS Bank's long position.| Addiko Bank vs. Oberbank AG | Addiko Bank vs. AMAG Austria Metall | Addiko Bank vs. Vienna Insurance Group | Addiko Bank vs. CNH Industrial NV |
| BKS Bank vs. Oberbank AG | BKS Bank vs. Raiffeisen Bank International | BKS Bank vs. Wiener Privatbank SE | BKS Bank vs. Erste Group Bank |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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