Correlation Between Metall Zug and Starrag Group
Can any of the company-specific risk be diversified away by investing in both Metall Zug and Starrag Group 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 Starrag Group 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 Starrag Group Holding, you can compare the effects of market volatilities on Metall Zug and Starrag Group 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 Starrag Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metall Zug and Starrag Group.
Diversification Opportunities for Metall Zug and Starrag Group
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metall and Starrag is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Metall Zug AG and Starrag Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starrag Group 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 Starrag Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starrag Group Holding has no effect on the direction of Metall Zug i.e., Metall Zug and Starrag Group go up and down completely randomly.
Pair Corralation between Metall Zug and Starrag Group
Assuming the 90 days trading horizon Metall Zug AG is expected to under-perform the Starrag Group. But the stock apears to be less risky and, when comparing its historical volatility, Metall Zug AG is 2.38 times less risky than Starrag Group. The stock trades about -0.47 of its potential returns per unit of risk. The Starrag Group Holding is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 4,000 in Starrag Group Holding on August 28, 2024 and sell it today you would lose (240.00) from holding Starrag Group Holding or give up 6.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metall Zug AG vs. Starrag Group Holding
Performance |
| Timeline |
| Metall Zug AG |
| Starrag Group Holding |
Metall Zug and Starrag Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metall Zug and Starrag Group
The main advantage of trading using opposite Metall Zug and Starrag Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metall Zug position performs unexpectedly, Starrag Group 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 Starrag Group will offset losses from the drop in Starrag Group's long position.| Metall Zug vs. Bucher Industries AG | Metall Zug vs. Burckhardt Compression | Metall Zug vs. Also Holding AG | Metall Zug vs. Hubersuhner AG |
| Starrag Group vs. Carlo Gavazzi Holding | Starrag Group vs. Mikron Holding AG | Starrag Group vs. Valartis Group 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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