Correlation Between Burgenland Holding and BAWAG Group
Can any of the company-specific risk be diversified away by investing in both Burgenland Holding and BAWAG Group 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 Burgenland Holding and BAWAG Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burgenland Holding Aktiengesellschaft and BAWAG Group AG, you can compare the effects of market volatilities on Burgenland Holding and BAWAG Group 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 Burgenland Holding with a short position of BAWAG Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burgenland Holding and BAWAG Group.
Diversification Opportunities for Burgenland Holding and BAWAG Group
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Burgenland and BAWAG is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Burgenland Holding Aktiengesel and BAWAG Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAWAG Group AG and Burgenland Holding 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 Burgenland Holding Aktiengesellschaft are associated (or correlated) with BAWAG Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAWAG Group AG has no effect on the direction of Burgenland Holding i.e., Burgenland Holding and BAWAG Group go up and down completely randomly.
Pair Corralation between Burgenland Holding and BAWAG Group
Assuming the 90 days trading horizon Burgenland Holding Aktiengesellschaft is expected to under-perform the BAWAG Group. But the stock apears to be less risky and, when comparing its historical volatility, Burgenland Holding Aktiengesellschaft is 1.32 times less risky than BAWAG Group. The stock trades about -0.04 of its potential returns per unit of risk. The BAWAG Group AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,848 in BAWAG Group AG on August 27, 2024 and sell it today you would earn a total of 2,497 from holding BAWAG Group AG or generate 51.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burgenland Holding Aktiengesel vs. BAWAG Group AG
Performance |
| Timeline |
| Burgenland Holding |
| BAWAG Group AG |
Burgenland Holding and BAWAG Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burgenland Holding and BAWAG Group
The main advantage of trading using opposite Burgenland Holding and BAWAG Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burgenland Holding position performs unexpectedly, BAWAG Group 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 BAWAG Group will offset losses from the drop in BAWAG Group's long position.| Burgenland Holding vs. EVN AG | Burgenland Holding vs. AGRANA Beteiligungs Aktiengesellschaft | Burgenland Holding vs. Palfinger AG | Burgenland Holding vs. Rosenbauer International AG |
| BAWAG Group vs. Erste Group Bank | BAWAG Group vs. Raiffeisen Bank International | BAWAG Group vs. UNIQA Insurance Group | BAWAG Group vs. OMV Aktiengesellschaft |
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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