Correlation Between Lenzing Aktiengesellscha and AMAG Austria
Can any of the company-specific risk be diversified away by investing in both Lenzing Aktiengesellscha and AMAG Austria 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 Lenzing Aktiengesellscha and AMAG Austria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lenzing Aktiengesellschaft and AMAG Austria Metall, you can compare the effects of market volatilities on Lenzing Aktiengesellscha and AMAG Austria 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 Lenzing Aktiengesellscha with a short position of AMAG Austria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lenzing Aktiengesellscha and AMAG Austria.
Diversification Opportunities for Lenzing Aktiengesellscha and AMAG Austria
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lenzing and AMAG is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lenzing Aktiengesellschaft and AMAG Austria Metall in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG Austria Metall and Lenzing 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 Lenzing Aktiengesellschaft are associated (or correlated) with AMAG Austria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG Austria Metall has no effect on the direction of Lenzing Aktiengesellscha i.e., Lenzing Aktiengesellscha and AMAG Austria go up and down completely randomly.
Pair Corralation between Lenzing Aktiengesellscha and AMAG Austria
Assuming the 90 days trading horizon Lenzing Aktiengesellschaft is expected to under-perform the AMAG Austria. In addition to that, Lenzing Aktiengesellscha is 1.91 times more volatile than AMAG Austria Metall. It trades about -0.3 of its total potential returns per unit of risk. AMAG Austria Metall is currently generating about -0.22 per unit of volatility. If you would invest 2,400 in AMAG Austria Metall on August 23, 2024 and sell it today you would lose (110.00) from holding AMAG Austria Metall or give up 4.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lenzing Aktiengesellschaft vs. AMAG Austria Metall
Performance |
| Timeline |
| Lenzing Aktiengesellscha |
| AMAG Austria Metall |
Lenzing Aktiengesellscha and AMAG Austria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lenzing Aktiengesellscha and AMAG Austria
The main advantage of trading using opposite Lenzing Aktiengesellscha and AMAG Austria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lenzing Aktiengesellscha position performs unexpectedly, AMAG Austria 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 AMAG Austria will offset losses from the drop in AMAG Austria's long position.| Lenzing Aktiengesellscha vs. Voestalpine AG | Lenzing Aktiengesellscha vs. Andritz AG | Lenzing Aktiengesellscha vs. Wienerberger AG | Lenzing Aktiengesellscha vs. OMV Aktiengesellschaft |
| AMAG Austria vs. Lenzing Aktiengesellschaft | AMAG Austria vs. Voestalpine AG | AMAG Austria vs. EVN AG | AMAG Austria vs. Facc 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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