Correlation Between Lenzing Aktiengesellscha and Mayr Melnhof
Can any of the company-specific risk be diversified away by investing in both Lenzing Aktiengesellscha and Mayr Melnhof 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 Mayr Melnhof into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lenzing Aktiengesellschaft and Mayr Melnhof Karton AG, you can compare the effects of market volatilities on Lenzing Aktiengesellscha and Mayr Melnhof 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 Mayr Melnhof. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lenzing Aktiengesellscha and Mayr Melnhof.
Diversification Opportunities for Lenzing Aktiengesellscha and Mayr Melnhof
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lenzing and Mayr is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lenzing Aktiengesellschaft and Mayr Melnhof Karton AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayr Melnhof Karton 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 Mayr Melnhof. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayr Melnhof Karton has no effect on the direction of Lenzing Aktiengesellscha i.e., Lenzing Aktiengesellscha and Mayr Melnhof go up and down completely randomly.
Pair Corralation between Lenzing Aktiengesellscha and Mayr Melnhof
Assuming the 90 days trading horizon Lenzing Aktiengesellschaft is expected to generate 0.88 times more return on investment than Mayr Melnhof. However, Lenzing Aktiengesellschaft is 1.13 times less risky than Mayr Melnhof. It trades about -0.16 of its potential returns per unit of risk. Mayr Melnhof Karton AG is currently generating about -0.35 per unit of risk. If you would invest 3,120 in Lenzing Aktiengesellschaft on September 1, 2024 and sell it today you would lose (185.00) from holding Lenzing Aktiengesellschaft or give up 5.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lenzing Aktiengesellschaft vs. Mayr Melnhof Karton AG
Performance |
| Timeline |
| Lenzing Aktiengesellscha |
| Mayr Melnhof Karton |
Lenzing Aktiengesellscha and Mayr Melnhof Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lenzing Aktiengesellscha and Mayr Melnhof
The main advantage of trading using opposite Lenzing Aktiengesellscha and Mayr Melnhof positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lenzing Aktiengesellscha position performs unexpectedly, Mayr Melnhof 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 Mayr Melnhof will offset losses from the drop in Mayr Melnhof's long position.| Lenzing Aktiengesellscha vs. Voestalpine AG | Lenzing Aktiengesellscha vs. Andritz AG | Lenzing Aktiengesellscha vs. Wienerberger AG | Lenzing Aktiengesellscha vs. OMV Aktiengesellschaft |
| Mayr Melnhof vs. Wienerberger AG | Mayr Melnhof vs. Andritz AG | Mayr Melnhof vs. Lenzing Aktiengesellschaft | Mayr Melnhof vs. EVN 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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