Correlation Between BAWAG Group and VERBUND AG
Can any of the company-specific risk be diversified away by investing in both BAWAG Group and VERBUND AG 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 VERBUND AG 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 VERBUND AG, you can compare the effects of market volatilities on BAWAG Group and VERBUND AG 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 VERBUND AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAWAG Group and VERBUND AG.
Diversification Opportunities for BAWAG Group and VERBUND AG
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between BAWAG and VERBUND is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding BAWAG Group AG and VERBUND AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VERBUND AG 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 VERBUND AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VERBUND AG has no effect on the direction of BAWAG Group i.e., BAWAG Group and VERBUND AG go up and down completely randomly.
Pair Corralation between BAWAG Group and VERBUND AG
Assuming the 90 days horizon BAWAG Group AG is expected to generate 1.29 times more return on investment than VERBUND AG. However, BAWAG Group is 1.29 times more volatile than VERBUND AG. It trades about 0.48 of its potential returns per unit of risk. VERBUND AG is currently generating about -0.09 per unit of risk. If you would invest 8,500 in BAWAG Group AG on December 6, 2024 and sell it today you would earn a total of 1,650 from holding BAWAG Group AG or generate 19.41% 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. VERBUND AG
Performance |
| Timeline |
| BAWAG Group AG |
| VERBUND AG |
BAWAG Group and VERBUND AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAWAG Group and VERBUND AG
The main advantage of trading using opposite BAWAG Group and VERBUND AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAWAG Group position performs unexpectedly, VERBUND AG 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 VERBUND AG will offset losses from the drop in VERBUND AG'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 |
| VERBUND AG vs. OMV Aktiengesellschaft | VERBUND AG vs. Voestalpine AG | VERBUND AG vs. Wienerberger AG | VERBUND AG vs. EVN 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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