Correlation Between Feintool International and Aryzta AG
Can any of the company-specific risk be diversified away by investing in both Feintool International and Aryzta 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 Feintool International and Aryzta AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Feintool International Holding and Aryzta AG, you can compare the effects of market volatilities on Feintool International and Aryzta 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 Feintool International with a short position of Aryzta AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feintool International and Aryzta AG.
Diversification Opportunities for Feintool International and Aryzta AG
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Feintool and Aryzta is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Feintool International Holding and Aryzta AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aryzta AG and Feintool International 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 Feintool International Holding are associated (or correlated) with Aryzta AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aryzta AG has no effect on the direction of Feintool International i.e., Feintool International and Aryzta AG go up and down completely randomly.
Pair Corralation between Feintool International and Aryzta AG
Assuming the 90 days trading horizon Feintool International Holding is expected to under-perform the Aryzta AG. In addition to that, Feintool International is 1.1 times more volatile than Aryzta AG. It trades about -0.05 of its total potential returns per unit of risk. Aryzta AG is currently generating about 0.01 per unit of volatility. If you would invest 147.00 in Aryzta AG on August 31, 2024 and sell it today you would earn a total of 4.00 from holding Aryzta AG or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Feintool International Holding vs. Aryzta AG
Performance |
| Timeline |
| Feintool International |
| Aryzta AG |
Feintool International and Aryzta AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feintool International and Aryzta AG
The main advantage of trading using opposite Feintool International and Aryzta AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feintool International position performs unexpectedly, Aryzta 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 Aryzta AG will offset losses from the drop in Aryzta AG's long position.| Feintool International vs. Rieter Holding AG | Feintool International vs. Autoneum Holding AG | Feintool International vs. Bucher Industries AG | Feintool International vs. Komax Holding AG |
| Aryzta AG vs. Emmi AG | Aryzta AG vs. Feintool International Holding | Aryzta AG vs. Implenia AG | Aryzta AG vs. Bossard Holding 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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