Correlation Between AZZ Incorporated and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both AZZ Incorporated and Thyssenkrupp 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 AZZ Incorporated and Thyssenkrupp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AZZ Incorporated and Thyssenkrupp AG ADR, you can compare the effects of market volatilities on AZZ Incorporated and Thyssenkrupp 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 AZZ Incorporated with a short position of Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AZZ Incorporated and Thyssenkrupp.
Diversification Opportunities for AZZ Incorporated and Thyssenkrupp
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AZZ and Thyssenkrupp is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding AZZ Incorporated and Thyssenkrupp AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thyssenkrupp AG ADR and AZZ Incorporated 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 AZZ Incorporated are associated (or correlated) with Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thyssenkrupp AG ADR has no effect on the direction of AZZ Incorporated i.e., AZZ Incorporated and Thyssenkrupp go up and down completely randomly.
Pair Corralation between AZZ Incorporated and Thyssenkrupp
Considering the 90-day investment horizon AZZ Incorporated is expected to generate 0.59 times more return on investment than Thyssenkrupp. However, AZZ Incorporated is 1.68 times less risky than Thyssenkrupp. It trades about 0.36 of its potential returns per unit of risk. Thyssenkrupp AG ADR is currently generating about 0.2 per unit of risk. If you would invest 7,618 in AZZ Incorporated on September 1, 2024 and sell it today you would earn a total of 1,696 from holding AZZ Incorporated or generate 22.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
AZZ Incorporated vs. Thyssenkrupp AG ADR
Performance |
| Timeline |
| AZZ Incorporated |
| Thyssenkrupp AG ADR |
AZZ Incorporated and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AZZ Incorporated and Thyssenkrupp
The main advantage of trading using opposite AZZ Incorporated and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AZZ Incorporated position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.| AZZ Incorporated vs. Maximus | AZZ Incorporated vs. ABM Industries Incorporated | AZZ Incorporated vs. CBIZ Inc | AZZ Incorporated vs. Cass Information Systems |
| Thyssenkrupp vs. Mueller Industries | Thyssenkrupp vs. ESAB Corp | Thyssenkrupp vs. Worthington Industries | Thyssenkrupp vs. Allegheny Technologies Incorporated |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |