Correlation Between Austrian Traded and BKS Bank
Can any of the company-specific risk be diversified away by investing in both Austrian Traded and BKS Bank 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 Austrian Traded and BKS Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austrian Traded Index and BKS Bank AG, you can compare the effects of market volatilities on Austrian Traded and BKS Bank 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 Austrian Traded with a short position of BKS Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austrian Traded and BKS Bank.
Diversification Opportunities for Austrian Traded and BKS Bank
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Austrian and BKS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Austrian Traded Index and BKS Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKS Bank AG and Austrian Traded 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 Austrian Traded Index are associated (or correlated) with BKS Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKS Bank AG has no effect on the direction of Austrian Traded i.e., Austrian Traded and BKS Bank go up and down completely randomly.
Pair Corralation between Austrian Traded and BKS Bank
Assuming the 90 days trading horizon Austrian Traded is expected to generate 1.46 times less return on investment than BKS Bank. But when comparing it to its historical volatility, Austrian Traded Index is 1.0 times less risky than BKS Bank. It trades about 0.02 of its potential returns per unit of risk. BKS Bank AG is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,360 in BKS Bank AG on August 27, 2024 and sell it today you would earn a total of 120.00 from holding BKS Bank AG or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Austrian Traded Index vs. BKS Bank AG
Performance |
| Timeline |
Austrian Traded and BKS Bank Volatility Contrast
Predicted Return Density |
| Returns |
Austrian Traded Index
Pair trading matchups for Austrian Traded
BKS Bank AG
Pair trading matchups for BKS Bank
Pair Trading with Austrian Traded and BKS Bank
The main advantage of trading using opposite Austrian Traded and BKS Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austrian Traded position performs unexpectedly, BKS Bank 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 BKS Bank will offset losses from the drop in BKS Bank's long position.| Austrian Traded vs. Addiko Bank AG | Austrian Traded vs. Oberbank AG | Austrian Traded vs. AMAG Austria Metall | Austrian Traded vs. UNIQA Insurance Group |
| BKS Bank vs. Addiko Bank AG | BKS Bank vs. Oberbank AG | BKS Bank vs. AMAG Austria Metall | BKS Bank vs. UNIQA 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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