Correlation Between Exor NV and Andritz AG
Can any of the company-specific risk be diversified away by investing in both Exor NV and Andritz AG 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 Exor NV and Andritz AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exor NV and Andritz AG, you can compare the effects of market volatilities on Exor NV and Andritz AG 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 Exor NV with a short position of Andritz AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exor NV and Andritz AG.
Diversification Opportunities for Exor NV and Andritz AG
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exor and Andritz is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Exor NV and Andritz AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andritz AG and Exor NV 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 Exor NV are associated (or correlated) with Andritz AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andritz AG has no effect on the direction of Exor NV i.e., Exor NV and Andritz AG go up and down completely randomly.
Pair Corralation between Exor NV and Andritz AG
Assuming the 90 days trading horizon Exor NV is expected to generate 0.71 times more return on investment than Andritz AG. However, Exor NV is 1.41 times less risky than Andritz AG. It trades about 0.05 of its potential returns per unit of risk. Andritz AG is currently generating about 0.01 per unit of risk. If you would invest 7,321 in Exor NV on August 30, 2024 and sell it today you would earn a total of 2,039 from holding Exor NV or generate 27.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exor NV vs. Andritz AG
Performance |
| Timeline |
| Exor NV |
| Andritz AG |
Exor NV and Andritz AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exor NV and Andritz AG
The main advantage of trading using opposite Exor NV and Andritz AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exor NV position performs unexpectedly, Andritz AG 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 Andritz AG will offset losses from the drop in Andritz AG's long position.| Exor NV vs. CNH Industrial NV | Exor NV vs. UNIQA Insurance Group | Exor NV vs. Addiko Bank AG | Exor NV vs. AMAG Austria Metall |
| Andritz AG vs. Voestalpine AG | Andritz AG vs. VERBUND AG | Andritz AG vs. OMV Aktiengesellschaft | Andritz AG vs. Wienerberger 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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