Correlation Between Addiko Bank and Facc AG
Can any of the company-specific risk be diversified away by investing in both Addiko Bank and Facc AG 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 Facc AG 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 Facc AG, you can compare the effects of market volatilities on Addiko Bank and Facc AG 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 Facc AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addiko Bank and Facc AG.
Diversification Opportunities for Addiko Bank and Facc AG
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Addiko and Facc is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Addiko Bank AG and Facc AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Facc 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 Facc AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Facc AG has no effect on the direction of Addiko Bank i.e., Addiko Bank and Facc AG go up and down completely randomly.
Pair Corralation between Addiko Bank and Facc AG
Assuming the 90 days trading horizon Addiko Bank AG is expected to generate 0.92 times more return on investment than Facc AG. However, Addiko Bank AG is 1.09 times less risky than Facc AG. It trades about 0.1 of its potential returns per unit of risk. Facc AG is currently generating about 0.02 per unit of risk. If you would invest 1,398 in Addiko Bank AG on August 27, 2024 and sell it today you would earn a total of 582.00 from holding Addiko Bank AG or generate 41.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addiko Bank AG vs. Facc AG
Performance |
| Timeline |
| Addiko Bank AG |
| Facc AG |
Addiko Bank and Facc AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addiko Bank and Facc AG
The main advantage of trading using opposite Addiko Bank and Facc AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addiko Bank position performs unexpectedly, Facc AG 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 Facc AG will offset losses from the drop in Facc AG's long position.| Addiko Bank vs. Erste Group Bank | Addiko Bank vs. Universal Music Group | Addiko Bank vs. AMAG Austria Metall | Addiko Bank vs. Wiener Privatbank SE |
| Facc AG vs. Voestalpine AG | Facc AG vs. Lenzing Aktiengesellschaft | Facc AG vs. AT S Austria | Facc AG vs. OMV Aktiengesellschaft |
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 CEOs Directory module to screen CEOs from public companies around the world.
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