Correlation Between EVN AG and Frequentis
Can any of the company-specific risk be diversified away by investing in both EVN AG and Frequentis 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 EVN AG and Frequentis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVN AG and Frequentis AG, you can compare the effects of market volatilities on EVN AG and Frequentis 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 EVN AG with a short position of Frequentis. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVN AG and Frequentis.
Diversification Opportunities for EVN AG and Frequentis
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between EVN and Frequentis is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding EVN AG and Frequentis AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frequentis AG and EVN AG 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 EVN AG are associated (or correlated) with Frequentis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frequentis AG has no effect on the direction of EVN AG i.e., EVN AG and Frequentis go up and down completely randomly.
Pair Corralation between EVN AG and Frequentis
Assuming the 90 days trading horizon EVN AG is expected to generate 0.65 times more return on investment than Frequentis. However, EVN AG is 1.54 times less risky than Frequentis. It trades about 0.02 of its potential returns per unit of risk. Frequentis AG is currently generating about 0.01 per unit of risk. If you would invest 2,140 in EVN AG on November 27, 2024 and sell it today you would earn a total of 190.00 from holding EVN AG or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
EVN AG vs. Frequentis AG
Performance |
| Timeline |
| EVN AG |
| Frequentis AG |
EVN AG and Frequentis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVN AG and Frequentis
The main advantage of trading using opposite EVN AG and Frequentis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVN AG position performs unexpectedly, Frequentis 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 Frequentis will offset losses from the drop in Frequentis' long position.The idea behind EVN AG and Frequentis AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Frequentis vs. AT S Austria | Frequentis vs. Lenzing Aktiengesellschaft | Frequentis vs. Facc AG | Frequentis 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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