Correlation Between AT S and Voestalpine
Can any of the company-specific risk be diversified away by investing in both AT S and Voestalpine 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 Voestalpine 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 Voestalpine AG, you can compare the effects of market volatilities on AT S and Voestalpine 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 Voestalpine. Check out your portfolio center. Please also check ongoing floating volatility patterns of AT S and Voestalpine.
Diversification Opportunities for AT S and Voestalpine
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ATS and Voestalpine is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding AT S Austria and Voestalpine AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voestalpine 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 Voestalpine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voestalpine AG has no effect on the direction of AT S i.e., AT S and Voestalpine go up and down completely randomly.
Pair Corralation between AT S and Voestalpine
Assuming the 90 days trading horizon AT S Austria is expected to generate 1.66 times more return on investment than Voestalpine. However, AT S is 1.66 times more volatile than Voestalpine AG. It trades about -0.05 of its potential returns per unit of risk. Voestalpine AG is currently generating about -0.08 per unit of risk. If you would invest 1,878 in AT S Austria on August 27, 2024 and sell it today you would lose (509.00) from holding AT S Austria or give up 27.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AT S Austria vs. Voestalpine AG
Performance |
| Timeline |
| AT S Austria |
| Voestalpine AG |
AT S and Voestalpine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AT S and Voestalpine
The main advantage of trading using opposite AT S and Voestalpine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AT S position performs unexpectedly, Voestalpine 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 Voestalpine will offset losses from the drop in Voestalpine's long position.| AT S vs. Voestalpine AG | AT S vs. Lenzing Aktiengesellschaft | AT S vs. Andritz AG | AT S vs. OMV Aktiengesellschaft |
| Voestalpine vs. OMV Aktiengesellschaft | Voestalpine vs. Raiffeisen Bank International | Voestalpine vs. Andritz AG | Voestalpine vs. VERBUND 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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