Correlation Between Palfinger and Facc AG
Can any of the company-specific risk be diversified away by investing in both Palfinger and Facc AG 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 Facc AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palfinger AG and Facc AG, you can compare the effects of market volatilities on Palfinger and Facc AG 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 Facc AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palfinger and Facc AG.
Diversification Opportunities for Palfinger and Facc AG
Very weak diversification
The 3 months correlation between Palfinger and Facc is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Palfinger AG and Facc AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Facc AG 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 Facc AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Facc AG has no effect on the direction of Palfinger i.e., Palfinger and Facc AG go up and down completely randomly.
Pair Corralation between Palfinger and Facc AG
Assuming the 90 days trading horizon Palfinger AG is expected to under-perform the Facc AG. But the stock apears to be less risky and, when comparing its historical volatility, Palfinger AG is 1.59 times less risky than Facc AG. The stock trades about -0.05 of its potential returns per unit of risk. The Facc AG is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 575.00 in Facc AG on August 26, 2024 and sell it today you would earn a total of 52.00 from holding Facc AG or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palfinger AG vs. Facc AG
Performance |
| Timeline |
| Palfinger AG |
| Facc AG |
Palfinger and Facc AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palfinger and Facc AG
The main advantage of trading using opposite Palfinger and Facc AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palfinger position performs unexpectedly, Facc AG 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 Facc AG will offset losses from the drop in Facc AG's long position.| Palfinger vs. RATH Aktiengesellschaft | Palfinger vs. Semperit Aktiengesellschaft Holding | Palfinger vs. Oesterr Post AG | Palfinger vs. Anheuser Busch InBev SANV |
| Facc AG vs. Voestalpine AG | Facc AG vs. Lenzing Aktiengesellschaft | Facc AG vs. AT S Austria | Facc AG vs. OMV 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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