Correlation Between Facc AG and Andritz AG
Can any of the company-specific risk be diversified away by investing in both Facc AG 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 Facc AG and Andritz AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Facc AG and Andritz AG, you can compare the effects of market volatilities on Facc AG 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 Facc AG with a short position of Andritz AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Facc AG and Andritz AG.
Diversification Opportunities for Facc AG and Andritz AG
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Facc and Andritz is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Facc AG and Andritz AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andritz AG and Facc 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 Facc AG 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 Facc AG i.e., Facc AG and Andritz AG go up and down completely randomly.
Pair Corralation between Facc AG and Andritz AG
Assuming the 90 days trading horizon Facc AG is expected to generate 1.61 times more return on investment than Andritz AG. However, Facc AG is 1.61 times more volatile than Andritz AG. It trades about 0.01 of its potential returns per unit of risk. Andritz AG is currently generating about -0.14 per unit of risk. If you would invest 622.00 in Facc AG on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Facc AG or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Facc AG vs. Andritz AG
Performance |
| Timeline |
| Facc AG |
| Andritz AG |
Facc AG and Andritz AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Facc AG and Andritz AG
The main advantage of trading using opposite Facc AG and Andritz AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Facc AG 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.| Facc AG vs. Voestalpine AG | Facc AG vs. Lenzing Aktiengesellschaft | Facc AG vs. AT S Austria | Facc AG vs. OMV Aktiengesellschaft |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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