Correlation Between Gurktaler Aktiengesellscha and Burgenland Holding
Can any of the company-specific risk be diversified away by investing in both Gurktaler Aktiengesellscha and Burgenland Holding 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 Gurktaler Aktiengesellscha and Burgenland Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gurktaler Aktiengesellschaft and Burgenland Holding Aktiengesellschaft, you can compare the effects of market volatilities on Gurktaler Aktiengesellscha and Burgenland Holding 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 Gurktaler Aktiengesellscha with a short position of Burgenland Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gurktaler Aktiengesellscha and Burgenland Holding.
Diversification Opportunities for Gurktaler Aktiengesellscha and Burgenland Holding
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gurktaler and Burgenland is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Gurktaler Aktiengesellschaft and Burgenland Holding Aktiengesel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burgenland Holding and Gurktaler Aktiengesellscha 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 Gurktaler Aktiengesellschaft are associated (or correlated) with Burgenland Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burgenland Holding has no effect on the direction of Gurktaler Aktiengesellscha i.e., Gurktaler Aktiengesellscha and Burgenland Holding go up and down completely randomly.
Pair Corralation between Gurktaler Aktiengesellscha and Burgenland Holding
Assuming the 90 days trading horizon Gurktaler Aktiengesellschaft is expected to generate 0.91 times more return on investment than Burgenland Holding. However, Gurktaler Aktiengesellschaft is 1.09 times less risky than Burgenland Holding. It trades about 0.33 of its potential returns per unit of risk. Burgenland Holding Aktiengesellschaft is currently generating about 0.08 per unit of risk. If you would invest 780.00 in Gurktaler Aktiengesellschaft on November 28, 2024 and sell it today you would earn a total of 100.00 from holding Gurktaler Aktiengesellschaft or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gurktaler Aktiengesellschaft vs. Burgenland Holding Aktiengesel
Performance |
| Timeline |
| Gurktaler Aktiengesellscha |
| Burgenland Holding |
Gurktaler Aktiengesellscha and Burgenland Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gurktaler Aktiengesellscha and Burgenland Holding
The main advantage of trading using opposite Gurktaler Aktiengesellscha and Burgenland Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gurktaler Aktiengesellscha position performs unexpectedly, Burgenland Holding 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 Burgenland Holding will offset losses from the drop in Burgenland Holding's long position.The idea behind Gurktaler Aktiengesellschaft and Burgenland Holding Aktiengesellschaft pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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