Correlation Between Kapsch Traffic and Burgenland Holding
Can any of the company-specific risk be diversified away by investing in both Kapsch Traffic 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 Kapsch Traffic and Burgenland Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kapsch Traffic and Burgenland Holding Aktiengesellschaft, you can compare the effects of market volatilities on Kapsch Traffic 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 Kapsch Traffic with a short position of Burgenland Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kapsch Traffic and Burgenland Holding.
Diversification Opportunities for Kapsch Traffic and Burgenland Holding
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kapsch and Burgenland is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Kapsch Traffic and Burgenland Holding Aktiengesel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burgenland Holding and Kapsch Traffic 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 Kapsch Traffic 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 Kapsch Traffic i.e., Kapsch Traffic and Burgenland Holding go up and down completely randomly.
Pair Corralation between Kapsch Traffic and Burgenland Holding
Assuming the 90 days trading horizon Kapsch Traffic is expected to under-perform the Burgenland Holding. In addition to that, Kapsch Traffic is 1.51 times more volatile than Burgenland Holding Aktiengesellschaft. It trades about -0.26 of its total potential returns per unit of risk. Burgenland Holding Aktiengesellschaft is currently generating about -0.13 per unit of volatility. If you would invest 7,300 in Burgenland Holding Aktiengesellschaft on August 24, 2024 and sell it today you would lose (200.00) from holding Burgenland Holding Aktiengesellschaft or give up 2.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kapsch Traffic vs. Burgenland Holding Aktiengesel
Performance |
| Timeline |
| Kapsch Traffic |
| Burgenland Holding |
Kapsch Traffic and Burgenland Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kapsch Traffic and Burgenland Holding
The main advantage of trading using opposite Kapsch Traffic and Burgenland Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kapsch Traffic 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.| Kapsch Traffic vs. Lenzing Aktiengesellschaft | Kapsch Traffic vs. Vienna Insurance Group | Kapsch Traffic vs. Semperit Aktiengesellschaft Holding | Kapsch Traffic vs. EVN AG |
| Burgenland Holding vs. EVN AG | Burgenland Holding vs. AGRANA Beteiligungs Aktiengesellschaft | Burgenland Holding vs. Palfinger AG | Burgenland Holding vs. Rosenbauer International 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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