Correlation Between Lenzing Aktiengesellscha and Linz Textil
Can any of the company-specific risk be diversified away by investing in both Lenzing Aktiengesellscha and Linz Textil 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 Linz Textil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lenzing Aktiengesellschaft and Linz Textil Holding, you can compare the effects of market volatilities on Lenzing Aktiengesellscha and Linz Textil 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 Linz Textil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lenzing Aktiengesellscha and Linz Textil.
Diversification Opportunities for Lenzing Aktiengesellscha and Linz Textil
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lenzing and Linz is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lenzing Aktiengesellschaft and Linz Textil Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linz Textil Holding 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 Linz Textil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linz Textil Holding has no effect on the direction of Lenzing Aktiengesellscha i.e., Lenzing Aktiengesellscha and Linz Textil go up and down completely randomly.
Pair Corralation between Lenzing Aktiengesellscha and Linz Textil
Assuming the 90 days trading horizon Lenzing Aktiengesellschaft is expected to under-perform the Linz Textil. But the stock apears to be less risky and, when comparing its historical volatility, Lenzing Aktiengesellschaft is 1.56 times less risky than Linz Textil. The stock trades about -0.16 of its potential returns per unit of risk. The Linz Textil Holding is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 16,000 in Linz Textil Holding on August 31, 2024 and sell it today you would earn a total of 4,800 from holding Linz Textil Holding or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lenzing Aktiengesellschaft vs. Linz Textil Holding
Performance |
| Timeline |
| Lenzing Aktiengesellscha |
| Linz Textil Holding |
Lenzing Aktiengesellscha and Linz Textil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lenzing Aktiengesellscha and Linz Textil
The main advantage of trading using opposite Lenzing Aktiengesellscha and Linz Textil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lenzing Aktiengesellscha position performs unexpectedly, Linz Textil 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 Linz Textil will offset losses from the drop in Linz Textil's long position.| Lenzing Aktiengesellscha vs. Voestalpine AG | Lenzing Aktiengesellscha vs. Andritz AG | Lenzing Aktiengesellscha vs. Wienerberger AG | Lenzing Aktiengesellscha vs. OMV Aktiengesellschaft |
| Linz Textil vs. Kapsch Traffic | Linz Textil vs. Wolford Aktiengesellschaft | Linz Textil vs. AMAG Austria Metall | Linz Textil 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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