Correlation Between Facc AG and AT S
Can any of the company-specific risk be diversified away by investing in both Facc AG and AT S 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 AT S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Facc AG and AT S Austria, you can compare the effects of market volatilities on Facc AG and AT S 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 AT S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Facc AG and AT S.
Diversification Opportunities for Facc AG and AT S
Significant diversification
The 3 months correlation between Facc and ATS is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Facc AG and AT S Austria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AT S Austria 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 AT S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AT S Austria has no effect on the direction of Facc AG i.e., Facc AG and AT S go up and down completely randomly.
Pair Corralation between Facc AG and AT S
Assuming the 90 days trading horizon Facc AG is expected to generate 0.75 times more return on investment than AT S. However, Facc AG is 1.34 times less risky than AT S. It trades about -0.07 of its potential returns per unit of risk. AT S Austria is currently generating about -0.52 per unit of risk. If you would invest 648.00 in Facc AG on August 29, 2024 and sell it today you would lose (26.00) from holding Facc AG or give up 4.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Facc AG vs. AT S Austria
Performance |
| Timeline |
| Facc AG |
| AT S Austria |
Facc AG and AT S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Facc AG and AT S
The main advantage of trading using opposite Facc AG and AT S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Facc AG position performs unexpectedly, AT S 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 AT S will offset losses from the drop in AT S's long position.| Facc AG vs. Voestalpine AG | Facc AG vs. Lenzing Aktiengesellschaft | Facc AG vs. AT S Austria | Facc AG vs. OMV Aktiengesellschaft |
| AT S vs. Voestalpine AG | AT S vs. Lenzing Aktiengesellschaft | AT S vs. Andritz AG | AT S vs. OMV 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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