Correlation Between Aluflexpack and Orior AG
Can any of the company-specific risk be diversified away by investing in both Aluflexpack and Orior 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 Aluflexpack and Orior AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluflexpack AG and Orior AG, you can compare the effects of market volatilities on Aluflexpack and Orior 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 Aluflexpack with a short position of Orior AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluflexpack and Orior AG.
Diversification Opportunities for Aluflexpack and Orior AG
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aluflexpack and Orior is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Aluflexpack AG and Orior AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orior AG and Aluflexpack 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 Aluflexpack AG are associated (or correlated) with Orior AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orior AG has no effect on the direction of Aluflexpack i.e., Aluflexpack and Orior AG go up and down completely randomly.
Pair Corralation between Aluflexpack and Orior AG
Assuming the 90 days trading horizon Aluflexpack AG is expected to generate 0.12 times more return on investment than Orior AG. However, Aluflexpack AG is 8.31 times less risky than Orior AG. It trades about -0.16 of its potential returns per unit of risk. Orior AG is currently generating about -0.25 per unit of risk. If you would invest 1,600 in Aluflexpack AG on December 30, 2024 and sell it today you would lose (35.00) from holding Aluflexpack AG or give up 2.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluflexpack AG vs. Orior AG
Performance |
| Timeline |
| Aluflexpack AG |
| Orior AG |
Aluflexpack and Orior AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluflexpack and Orior AG
The main advantage of trading using opposite Aluflexpack and Orior AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluflexpack position performs unexpectedly, Orior 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 Orior AG will offset losses from the drop in Orior AG's long position.| Aluflexpack vs. Softwareone Holding | ||
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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