Correlation Between AMADEUS IT and Bechtle AG
Can any of the company-specific risk be diversified away by investing in both AMADEUS IT and Bechtle 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 AMADEUS IT and Bechtle AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMADEUS IT GRP and Bechtle AG, you can compare the effects of market volatilities on AMADEUS IT and Bechtle 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 AMADEUS IT with a short position of Bechtle AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMADEUS IT and Bechtle AG.
Diversification Opportunities for AMADEUS IT and Bechtle AG
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMADEUS and Bechtle is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding AMADEUS IT GRP and Bechtle AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bechtle AG and AMADEUS IT 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 AMADEUS IT GRP are associated (or correlated) with Bechtle AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bechtle AG has no effect on the direction of AMADEUS IT i.e., AMADEUS IT and Bechtle AG go up and down completely randomly.
Pair Corralation between AMADEUS IT and Bechtle AG
Assuming the 90 days trading horizon AMADEUS IT GRP is expected to generate 0.68 times more return on investment than Bechtle AG. However, AMADEUS IT GRP is 1.46 times less risky than Bechtle AG. It trades about -0.07 of its potential returns per unit of risk. Bechtle AG is currently generating about -0.16 per unit of risk. If you would invest 6,700 in AMADEUS IT GRP on August 29, 2024 and sell it today you would lose (150.00) from holding AMADEUS IT GRP or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMADEUS IT GRP vs. Bechtle AG
Performance |
| Timeline |
| AMADEUS IT GRP |
| Bechtle AG |
AMADEUS IT and Bechtle AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMADEUS IT and Bechtle AG
The main advantage of trading using opposite AMADEUS IT and Bechtle AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMADEUS IT position performs unexpectedly, Bechtle 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 Bechtle AG will offset losses from the drop in Bechtle AG's long position.| AMADEUS IT vs. HF SINCLAIR P | AMADEUS IT vs. Nordic Semiconductor ASA | AMADEUS IT vs. Enter Air SA | AMADEUS IT vs. Pentair plc |
| Bechtle AG vs. Virtus Investment Partners | Bechtle AG vs. AM EAGLE OUTFITTERS | Bechtle AG vs. G III Apparel Group | Bechtle AG vs. CVR Medical Corp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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