Correlation Between Palfinger and Burgenland Holding
Can any of the company-specific risk be diversified away by investing in both Palfinger and Burgenland Holding 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 Palfinger and Burgenland Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palfinger AG and Burgenland Holding Aktiengesellschaft, you can compare the effects of market volatilities on Palfinger and Burgenland Holding 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 Palfinger with a short position of Burgenland Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palfinger and Burgenland Holding.
Diversification Opportunities for Palfinger and Burgenland Holding
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Palfinger and Burgenland is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Palfinger AG and Burgenland Holding Aktiengesel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burgenland Holding and Palfinger 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 Palfinger AG are associated (or correlated) with Burgenland Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burgenland Holding has no effect on the direction of Palfinger i.e., Palfinger and Burgenland Holding go up and down completely randomly.
Pair Corralation between Palfinger and Burgenland Holding
Assuming the 90 days trading horizon Palfinger AG is expected to under-perform the Burgenland Holding. In addition to that, Palfinger is 1.14 times more volatile than Burgenland Holding Aktiengesellschaft. It trades about -0.13 of its total potential returns per unit of risk. Burgenland Holding Aktiengesellschaft is currently generating about -0.01 per unit of volatility. If you would invest 7,300 in Burgenland Holding Aktiengesellschaft on August 24, 2024 and sell it today you would lose (200.00) from holding Burgenland Holding Aktiengesellschaft or give up 2.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palfinger AG vs. Burgenland Holding Aktiengesel
Performance |
| Timeline |
| Palfinger AG |
| Burgenland Holding |
Palfinger and Burgenland Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palfinger and Burgenland Holding
The main advantage of trading using opposite Palfinger and Burgenland Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palfinger position performs unexpectedly, Burgenland Holding 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 Burgenland Holding will offset losses from the drop in Burgenland Holding's long position.| Palfinger vs. RATH Aktiengesellschaft | Palfinger vs. AT S Austria | Palfinger vs. BAWAG Group AG | Palfinger vs. Semperit Aktiengesellschaft Holding |
| Burgenland Holding vs. EVN AG | Burgenland Holding vs. AGRANA Beteiligungs Aktiengesellschaft | Burgenland Holding vs. Palfinger AG | Burgenland Holding vs. Kapsch Traffic |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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