Correlation Between IShares ATX and BAWAG Group
Can any of the company-specific risk be diversified away by investing in both IShares ATX 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 IShares ATX and BAWAG Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares ATX UCITS and BAWAG Group AG, you can compare the effects of market volatilities on IShares ATX 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 IShares ATX with a short position of BAWAG Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ATX and BAWAG Group.
Diversification Opportunities for IShares ATX and BAWAG Group
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and BAWAG is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding iShares ATX UCITS 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 IShares ATX 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 iShares ATX UCITS 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 IShares ATX i.e., IShares ATX and BAWAG Group go up and down completely randomly.
Pair Corralation between IShares ATX and BAWAG Group
Assuming the 90 days trading horizon IShares ATX is expected to generate 8.37 times less return on investment than BAWAG Group. In addition to that, IShares ATX is 1.03 times more volatile than BAWAG Group AG. It trades about 0.03 of its total potential returns per unit of risk. BAWAG Group AG is currently generating about 0.23 per unit of volatility. If you would invest 7,130 in BAWAG Group AG on September 2, 2024 and sell it today you would earn a total of 370.00 from holding BAWAG Group AG or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares ATX UCITS vs. BAWAG Group AG
Performance |
| Timeline |
| iShares ATX UCITS |
| BAWAG Group AG |
IShares ATX and BAWAG Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ATX and BAWAG Group
The main advantage of trading using opposite IShares ATX and BAWAG Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ATX 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.The idea behind iShares ATX UCITS and BAWAG Group 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.| BAWAG Group vs. Raiffeisen Bank International | BAWAG Group vs. Addiko Bank AG | BAWAG Group vs. Wiener Privatbank SE | BAWAG Group vs. RATH 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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