Correlation Between Lenzing Aktiengesellscha and Facc AG
Can any of the company-specific risk be diversified away by investing in both Lenzing Aktiengesellscha and Facc 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 Lenzing Aktiengesellscha and Facc AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lenzing Aktiengesellschaft and Facc AG, you can compare the effects of market volatilities on Lenzing Aktiengesellscha and Facc 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 Lenzing Aktiengesellscha with a short position of Facc AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lenzing Aktiengesellscha and Facc AG.
Diversification Opportunities for Lenzing Aktiengesellscha and Facc AG
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lenzing and Facc is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Lenzing Aktiengesellschaft and Facc AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Facc AG 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 Facc AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Facc AG has no effect on the direction of Lenzing Aktiengesellscha i.e., Lenzing Aktiengesellscha and Facc AG go up and down completely randomly.
Pair Corralation between Lenzing Aktiengesellscha and Facc AG
Assuming the 90 days trading horizon Lenzing Aktiengesellschaft is expected to under-perform the Facc AG. But the stock apears to be less risky and, when comparing its historical volatility, Lenzing Aktiengesellschaft is 1.34 times less risky than Facc AG. The stock trades about -0.26 of its potential returns per unit of risk. The Facc AG is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 648.00 in Facc AG on August 28, 2024 and sell it today you would lose (24.00) from holding Facc AG or give up 3.7% 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. Facc AG
Performance |
| Timeline |
| Lenzing Aktiengesellscha |
| Facc AG |
Lenzing Aktiengesellscha and Facc AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lenzing Aktiengesellscha and Facc AG
The main advantage of trading using opposite Lenzing Aktiengesellscha and Facc AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lenzing Aktiengesellscha position performs unexpectedly, Facc 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 Facc AG will offset losses from the drop in Facc AG's long position.| Lenzing Aktiengesellscha vs. Voestalpine AG | Lenzing Aktiengesellscha vs. Andritz AG | Lenzing Aktiengesellscha vs. Wienerberger AG | Lenzing Aktiengesellscha vs. OMV Aktiengesellschaft |
| Facc AG vs. Voestalpine AG | Facc AG vs. Lenzing Aktiengesellschaft | Facc AG vs. AT S Austria | Facc AG vs. OMV 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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