Correlation Between Metall Zug and Adval Tech
Can any of the company-specific risk be diversified away by investing in both Metall Zug and Adval Tech 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 Metall Zug and Adval Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metall Zug AG and Adval Tech Holding, you can compare the effects of market volatilities on Metall Zug and Adval Tech 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 Metall Zug with a short position of Adval Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metall Zug and Adval Tech.
Diversification Opportunities for Metall Zug and Adval Tech
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Metall and Adval is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Metall Zug AG and Adval Tech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adval Tech Holding and Metall Zug 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 Metall Zug AG are associated (or correlated) with Adval Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adval Tech Holding has no effect on the direction of Metall Zug i.e., Metall Zug and Adval Tech go up and down completely randomly.
Pair Corralation between Metall Zug and Adval Tech
Assuming the 90 days trading horizon Metall Zug AG is expected to under-perform the Adval Tech. But the stock apears to be less risky and, when comparing its historical volatility, Metall Zug AG is 2.51 times less risky than Adval Tech. The stock trades about -0.42 of its potential returns per unit of risk. The Adval Tech Holding is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 7,900 in Adval Tech Holding on October 26, 2024 and sell it today you would lose (800.00) from holding Adval Tech Holding or give up 10.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 76.47% |
| Values | Daily Returns |
Metall Zug AG vs. Adval Tech Holding
Performance |
| Timeline |
| Metall Zug AG |
| Adval Tech Holding |
Metall Zug and Adval Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metall Zug and Adval Tech
The main advantage of trading using opposite Metall Zug and Adval Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metall Zug position performs unexpectedly, Adval Tech 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 Adval Tech will offset losses from the drop in Adval Tech's long position.| Metall Zug vs. Bucher Industries AG | Metall Zug vs. Burckhardt Compression | Metall Zug vs. Also Holding AG | Metall Zug vs. Emmi AG |
| Adval Tech vs. Feintool International Holding | Adval Tech vs. Also Holding AG | Adval Tech vs. Allreal Holding | Adval Tech vs. Forbo Holding 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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