Correlation Between Austrian Traded and RATH Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Austrian Traded and RATH Aktiengesellscha 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 RATH Aktiengesellscha 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 RATH Aktiengesellschaft, you can compare the effects of market volatilities on Austrian Traded and RATH Aktiengesellscha 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 RATH Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austrian Traded and RATH Aktiengesellscha.
Diversification Opportunities for Austrian Traded and RATH Aktiengesellscha
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Austrian and RATH is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Austrian Traded Index and RATH Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RATH Aktiengesellschaft 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 RATH Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RATH Aktiengesellschaft has no effect on the direction of Austrian Traded i.e., Austrian Traded and RATH Aktiengesellscha go up and down completely randomly.
Pair Corralation between Austrian Traded and RATH Aktiengesellscha
Assuming the 90 days trading horizon Austrian Traded Index is expected to under-perform the RATH Aktiengesellscha. In addition to that, Austrian Traded is 1.9 times more volatile than RATH Aktiengesellschaft. It trades about -0.09 of its total potential returns per unit of risk. RATH Aktiengesellschaft is currently generating about 0.0 per unit of volatility. If you would invest 2,500 in RATH Aktiengesellschaft on August 27, 2024 and sell it today you would earn a total of 0.00 from holding RATH Aktiengesellschaft or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Austrian Traded Index vs. RATH Aktiengesellschaft
Performance |
| Timeline |
Austrian Traded and RATH Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Austrian Traded Index
Pair trading matchups for Austrian Traded
RATH Aktiengesellschaft
Pair trading matchups for RATH Aktiengesellscha
Pair Trading with Austrian Traded and RATH Aktiengesellscha
The main advantage of trading using opposite Austrian Traded and RATH Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austrian Traded position performs unexpectedly, RATH Aktiengesellscha 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 RATH Aktiengesellscha will offset losses from the drop in RATH Aktiengesellscha'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 |
| RATH Aktiengesellscha vs. Oberbank AG | RATH Aktiengesellscha vs. Semperit Aktiengesellschaft Holding | RATH Aktiengesellscha vs. Telekom Austria AG | RATH Aktiengesellscha vs. Oesterr Post 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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