Correlation Between AT S and VERBUND AG
Can any of the company-specific risk be diversified away by investing in both AT S and VERBUND 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 VERBUND 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 VERBUND AG, you can compare the effects of market volatilities on AT S and VERBUND 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 VERBUND AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of AT S and VERBUND AG.
Diversification Opportunities for AT S and VERBUND AG
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between ATS and VERBUND is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding AT S Austria and VERBUND AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VERBUND 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 VERBUND AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VERBUND AG has no effect on the direction of AT S i.e., AT S and VERBUND AG go up and down completely randomly.
Pair Corralation between AT S and VERBUND AG
Assuming the 90 days trading horizon AT S Austria is expected to under-perform the VERBUND AG. In addition to that, AT S is 1.67 times more volatile than VERBUND AG. It trades about -0.31 of its total potential returns per unit of risk. VERBUND AG is currently generating about -0.23 per unit of volatility. If you would invest 7,490 in VERBUND AG on September 18, 2024 and sell it today you would lose (620.00) from holding VERBUND AG or give up 8.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AT S Austria vs. VERBUND AG
Performance |
| Timeline |
| AT S Austria |
| VERBUND AG |
AT S and VERBUND AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AT S and VERBUND AG
The main advantage of trading using opposite AT S and VERBUND AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AT S position performs unexpectedly, VERBUND 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 VERBUND AG will offset losses from the drop in VERBUND AG's long position.| AT S vs. Voestalpine AG | AT S vs. Lenzing Aktiengesellschaft | AT S vs. Andritz AG | AT S vs. OMV Aktiengesellschaft |
| VERBUND AG vs. OMV Aktiengesellschaft | VERBUND AG vs. Voestalpine AG | VERBUND AG vs. Wienerberger AG | VERBUND AG vs. EVN 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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