Correlation Between AT S and Andritz AG
Can any of the company-specific risk be diversified away by investing in both AT S and Andritz 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 AT S and Andritz AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AT S Austria and Andritz AG, you can compare the effects of market volatilities on AT S and Andritz 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 AT S with a short position of Andritz AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of AT S and Andritz AG.
Diversification Opportunities for AT S and Andritz AG
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ATS and Andritz is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding AT S Austria and Andritz AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andritz AG and AT S 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 AT S Austria are associated (or correlated) with Andritz AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andritz AG has no effect on the direction of AT S i.e., AT S and Andritz AG go up and down completely randomly.
Pair Corralation between AT S and Andritz AG
Assuming the 90 days trading horizon AT S Austria is expected to under-perform the Andritz AG. In addition to that, AT S is 1.33 times more volatile than Andritz AG. It trades about -0.49 of its total potential returns per unit of risk. Andritz AG is currently generating about -0.35 per unit of volatility. If you would invest 6,230 in Andritz AG on August 27, 2024 and sell it today you would lose (1,025) from holding Andritz AG or give up 16.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AT S Austria vs. Andritz AG
Performance |
| Timeline |
| AT S Austria |
| Andritz AG |
AT S and Andritz AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AT S and Andritz AG
The main advantage of trading using opposite AT S and Andritz AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AT S position performs unexpectedly, Andritz 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 Andritz AG will offset losses from the drop in Andritz AG's long position.| AT S vs. Voestalpine AG | AT S vs. Lenzing Aktiengesellschaft | AT S vs. Andritz AG | AT S vs. OMV Aktiengesellschaft |
| Andritz AG vs. Voestalpine AG | Andritz AG vs. VERBUND AG | Andritz AG vs. OMV Aktiengesellschaft | Andritz AG vs. Wienerberger 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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