Correlation Between EVN AG and Mayr Melnhof
Can any of the company-specific risk be diversified away by investing in both EVN AG and Mayr Melnhof 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 Mayr Melnhof into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVN AG and Mayr Melnhof Karton AG, you can compare the effects of market volatilities on EVN AG and Mayr Melnhof 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 Mayr Melnhof. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVN AG and Mayr Melnhof.
Diversification Opportunities for EVN AG and Mayr Melnhof
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EVN and Mayr is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding EVN AG and Mayr Melnhof Karton AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayr Melnhof Karton 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 Mayr Melnhof. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayr Melnhof Karton has no effect on the direction of EVN AG i.e., EVN AG and Mayr Melnhof go up and down completely randomly.
Pair Corralation between EVN AG and Mayr Melnhof
Assuming the 90 days trading horizon EVN AG is expected to generate 0.89 times more return on investment than Mayr Melnhof. However, EVN AG is 1.13 times less risky than Mayr Melnhof. It trades about -0.12 of its potential returns per unit of risk. Mayr Melnhof Karton AG is currently generating about -0.35 per unit of risk. If you would invest 2,555 in EVN AG on September 1, 2024 and sell it today you would lose (105.00) from holding EVN AG or give up 4.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EVN AG vs. Mayr Melnhof Karton AG
Performance |
| Timeline |
| EVN AG |
| Mayr Melnhof Karton |
EVN AG and Mayr Melnhof Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVN AG and Mayr Melnhof
The main advantage of trading using opposite EVN AG and Mayr Melnhof positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVN AG position performs unexpectedly, Mayr Melnhof 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 Mayr Melnhof will offset losses from the drop in Mayr Melnhof's long position.The idea behind EVN AG and Mayr Melnhof Karton 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.| Mayr Melnhof vs. Wienerberger AG | Mayr Melnhof vs. Andritz AG | Mayr Melnhof vs. Lenzing Aktiengesellschaft | Mayr Melnhof 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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