Correlation Between BAWAG Group and Burgenland Holding
Can any of the company-specific risk be diversified away by investing in both BAWAG Group and Burgenland Holding 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 BAWAG Group and Burgenland Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BAWAG Group AG and Burgenland Holding Aktiengesellschaft, you can compare the effects of market volatilities on BAWAG Group and Burgenland Holding 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 BAWAG Group with a short position of Burgenland Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAWAG Group and Burgenland Holding.
Diversification Opportunities for BAWAG Group and Burgenland Holding
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BAWAG and Burgenland is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding BAWAG Group AG and Burgenland Holding Aktiengesel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burgenland Holding and BAWAG Group 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 BAWAG Group AG are associated (or correlated) with Burgenland Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burgenland Holding has no effect on the direction of BAWAG Group i.e., BAWAG Group and Burgenland Holding go up and down completely randomly.
Pair Corralation between BAWAG Group and Burgenland Holding
Assuming the 90 days horizon BAWAG Group AG is expected to generate 1.53 times more return on investment than Burgenland Holding. However, BAWAG Group is 1.53 times more volatile than Burgenland Holding Aktiengesellschaft. It trades about 0.12 of its potential returns per unit of risk. Burgenland Holding Aktiengesellschaft is currently generating about -0.03 per unit of risk. If you would invest 5,225 in BAWAG Group AG on August 27, 2024 and sell it today you would earn a total of 2,120 from holding BAWAG Group AG or generate 40.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BAWAG Group AG vs. Burgenland Holding Aktiengesel
Performance |
| Timeline |
| BAWAG Group AG |
| Burgenland Holding |
BAWAG Group and Burgenland Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAWAG Group and Burgenland Holding
The main advantage of trading using opposite BAWAG Group and Burgenland Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAWAG Group position performs unexpectedly, Burgenland Holding 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 Burgenland Holding will offset losses from the drop in Burgenland Holding's long position.| BAWAG Group vs. Erste Group Bank | BAWAG Group vs. Raiffeisen Bank International | BAWAG Group vs. UNIQA Insurance Group | BAWAG Group vs. OMV Aktiengesellschaft |
| Burgenland Holding vs. EVN AG | Burgenland Holding vs. AGRANA Beteiligungs Aktiengesellschaft | Burgenland Holding vs. Palfinger AG | Burgenland Holding vs. Rosenbauer International 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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