Correlation Between Kapsch Traffic and Zumtobel Group
Can any of the company-specific risk be diversified away by investing in both Kapsch Traffic and Zumtobel Group 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 Zumtobel Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kapsch Traffic and Zumtobel Group AG, you can compare the effects of market volatilities on Kapsch Traffic and Zumtobel Group 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 Zumtobel Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kapsch Traffic and Zumtobel Group.
Diversification Opportunities for Kapsch Traffic and Zumtobel Group
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kapsch and Zumtobel is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kapsch Traffic and Zumtobel Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zumtobel Group AG 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 Zumtobel Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zumtobel Group AG has no effect on the direction of Kapsch Traffic i.e., Kapsch Traffic and Zumtobel Group go up and down completely randomly.
Pair Corralation between Kapsch Traffic and Zumtobel Group
Assuming the 90 days trading horizon Kapsch Traffic is expected to under-perform the Zumtobel Group. But the stock apears to be less risky and, when comparing its historical volatility, Kapsch Traffic is 1.17 times less risky than Zumtobel Group. The stock trades about -0.09 of its potential returns per unit of risk. The Zumtobel Group AG is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 597.00 in Zumtobel Group AG on September 2, 2024 and sell it today you would lose (119.00) from holding Zumtobel Group AG or give up 19.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kapsch Traffic vs. Zumtobel Group AG
Performance |
| Timeline |
| Kapsch Traffic |
| Zumtobel Group AG |
Kapsch Traffic and Zumtobel Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kapsch Traffic and Zumtobel Group
The main advantage of trading using opposite Kapsch Traffic and Zumtobel Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kapsch Traffic position performs unexpectedly, Zumtobel Group 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 Zumtobel Group will offset losses from the drop in Zumtobel Group'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 |
| Zumtobel Group vs. Voestalpine AG | Zumtobel Group vs. Andritz AG | Zumtobel Group vs. Wienerberger AG | Zumtobel Group vs. Lenzing 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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