Correlation Between AMAG Austria and RATH Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both AMAG Austria and RATH Aktiengesellscha 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 AMAG Austria and RATH Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMAG Austria Metall and RATH Aktiengesellschaft, you can compare the effects of market volatilities on AMAG Austria and RATH Aktiengesellscha 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 AMAG Austria with a short position of RATH Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMAG Austria and RATH Aktiengesellscha.
Diversification Opportunities for AMAG Austria and RATH Aktiengesellscha
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between AMAG and RATH is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding AMAG Austria Metall and RATH Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RATH Aktiengesellschaft and AMAG Austria 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 AMAG Austria Metall are associated (or correlated) with RATH Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RATH Aktiengesellschaft has no effect on the direction of AMAG Austria i.e., AMAG Austria and RATH Aktiengesellscha go up and down completely randomly.
Pair Corralation between AMAG Austria and RATH Aktiengesellscha
Assuming the 90 days trading horizon AMAG Austria Metall is expected to under-perform the RATH Aktiengesellscha. But the stock apears to be less risky and, when comparing its historical volatility, AMAG Austria Metall is 1.82 times less risky than RATH Aktiengesellscha. The stock trades about -0.09 of its potential returns per unit of risk. The RATH Aktiengesellschaft is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,860 in RATH Aktiengesellschaft on August 26, 2024 and sell it today you would lose (360.00) from holding RATH Aktiengesellschaft or give up 12.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.75% |
| Values | Daily Returns |
AMAG Austria Metall vs. RATH Aktiengesellschaft
Performance |
| Timeline |
| AMAG Austria Metall |
| RATH Aktiengesellschaft |
AMAG Austria and RATH Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMAG Austria and RATH Aktiengesellscha
The main advantage of trading using opposite AMAG Austria and RATH Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMAG Austria position performs unexpectedly, RATH Aktiengesellscha 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 RATH Aktiengesellscha will offset losses from the drop in RATH Aktiengesellscha's long position.| AMAG Austria vs. Lenzing Aktiengesellschaft | AMAG Austria vs. Voestalpine AG | AMAG Austria vs. EVN AG | AMAG Austria vs. Facc AG |
| RATH Aktiengesellscha vs. AMAG Austria Metall | RATH Aktiengesellscha vs. Addiko Bank AG | RATH Aktiengesellscha vs. BKS Bank AG | RATH Aktiengesellscha vs. Vienna Insurance Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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