Correlation Between IShares Core and BAWAG Group
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 Core 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 Core DAX and BAWAG Group AG, you can compare the effects of market volatilities on IShares Core 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 Core with a short position of BAWAG Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and BAWAG Group.
Diversification Opportunities for IShares Core and BAWAG Group
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IShares and BAWAG is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core DAX 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 Core 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 Core DAX 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 Core i.e., IShares Core and BAWAG Group go up and down completely randomly.
Pair Corralation between IShares Core and BAWAG Group
Assuming the 90 days trading horizon IShares Core is expected to generate 2.6 times less return on investment than BAWAG Group. But when comparing it to its historical volatility, iShares Core DAX is 1.05 times less risky than BAWAG Group. It trades about 0.09 of its potential returns per unit of risk. BAWAG Group AG is currently generating about 0.23 of returns per unit of risk over similar time horizon. 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core DAX vs. BAWAG Group AG
Performance |
| Timeline |
| iShares Core DAX |
| BAWAG Group AG |
IShares Core and BAWAG Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and BAWAG Group
The main advantage of trading using opposite IShares Core and BAWAG Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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.| IShares Core vs. RATH Aktiengesellschaft | IShares Core vs. AT S Austria | IShares Core vs. BAWAG Group AG | IShares Core vs. Semperit Aktiengesellschaft Holding |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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