Correlation Between Austrian Traded and IShares ATX
Can any of the company-specific risk be diversified away by investing in both Austrian Traded and IShares ATX 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 IShares ATX 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 iShares ATX UCITS, you can compare the effects of market volatilities on Austrian Traded and IShares ATX 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 IShares ATX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austrian Traded and IShares ATX.
Diversification Opportunities for Austrian Traded and IShares ATX
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Austrian and IShares is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Austrian Traded Index and iShares ATX UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ATX UCITS 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 IShares ATX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ATX UCITS has no effect on the direction of Austrian Traded i.e., Austrian Traded and IShares ATX go up and down completely randomly.
Pair Corralation between Austrian Traded and IShares ATX
Assuming the 90 days trading horizon Austrian Traded Index is expected to generate 0.87 times more return on investment than IShares ATX. However, Austrian Traded Index is 1.15 times less risky than IShares ATX. It trades about -0.03 of its potential returns per unit of risk. iShares ATX UCITS is currently generating about -0.05 per unit of risk. If you would invest 370,062 in Austrian Traded Index on September 1, 2024 and sell it today you would lose (16,134) from holding Austrian Traded Index or give up 4.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.24% |
| Values | Daily Returns |
Austrian Traded Index vs. iShares ATX UCITS
Performance |
| Timeline |
Austrian Traded and IShares ATX Volatility Contrast
Predicted Return Density |
| Returns |
Austrian Traded Index
Pair trading matchups for Austrian Traded
iShares ATX UCITS
Pair trading matchups for IShares ATX
Pair Trading with Austrian Traded and IShares ATX
The main advantage of trading using opposite Austrian Traded and IShares ATX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austrian Traded position performs unexpectedly, IShares ATX 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 IShares ATX will offset losses from the drop in IShares ATX's long position.| Austrian Traded vs. UNIQA Insurance Group | Austrian Traded vs. SBM Offshore NV | Austrian Traded vs. AMAG Austria Metall | Austrian Traded vs. Oberbank 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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