Correlation Between Adval Tech and Metall Zug
Can any of the company-specific risk be diversified away by investing in both Adval Tech and Metall Zug 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 Adval Tech and Metall Zug into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adval Tech Holding and Metall Zug AG, you can compare the effects of market volatilities on Adval Tech and Metall Zug 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 Adval Tech with a short position of Metall Zug. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adval Tech and Metall Zug.
Diversification Opportunities for Adval Tech and Metall Zug
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Adval and Metall is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Adval Tech Holding and Metall Zug AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metall Zug AG and Adval Tech 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 Adval Tech Holding are associated (or correlated) with Metall Zug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metall Zug AG has no effect on the direction of Adval Tech i.e., Adval Tech and Metall Zug go up and down completely randomly.
Pair Corralation between Adval Tech and Metall Zug
Assuming the 90 days trading horizon Adval Tech Holding is expected to generate 2.51 times more return on investment than Metall Zug. However, Adval Tech is 2.51 times more volatile than Metall Zug AG. It trades about -0.14 of its potential returns per unit of risk. Metall Zug AG is currently generating about -0.42 per unit of risk. If you would invest 7,900 in Adval Tech Holding on October 26, 2024 and sell it today you would lose (800.00) from holding Adval Tech Holding or give up 10.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 76.47% |
| Values | Daily Returns |
Adval Tech Holding vs. Metall Zug AG
Performance |
| Timeline |
| Adval Tech Holding |
| Metall Zug AG |
Adval Tech and Metall Zug Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adval Tech and Metall Zug
The main advantage of trading using opposite Adval Tech and Metall Zug positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adval Tech position performs unexpectedly, Metall Zug 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 Metall Zug will offset losses from the drop in Metall Zug's long position.| Adval Tech vs. Feintool International Holding | Adval Tech vs. Also Holding AG | Adval Tech vs. Allreal Holding | Adval Tech vs. Forbo Holding AG |
| Metall Zug vs. Bucher Industries AG | Metall Zug vs. Burckhardt Compression | Metall Zug vs. Also Holding AG | Metall Zug vs. Emmi AG |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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