Correlation Between Polytec Holding and Warimpex Finanz
Can any of the company-specific risk be diversified away by investing in both Polytec Holding and Warimpex Finanz 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 Polytec Holding and Warimpex Finanz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polytec Holding AG and Warimpex Finanz und, you can compare the effects of market volatilities on Polytec Holding and Warimpex Finanz 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 Polytec Holding with a short position of Warimpex Finanz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polytec Holding and Warimpex Finanz.
Diversification Opportunities for Polytec Holding and Warimpex Finanz
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Polytec and Warimpex is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Polytec Holding AG and Warimpex Finanz und in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warimpex Finanz und and Polytec Holding 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 Polytec Holding AG are associated (or correlated) with Warimpex Finanz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warimpex Finanz und has no effect on the direction of Polytec Holding i.e., Polytec Holding and Warimpex Finanz go up and down completely randomly.
Pair Corralation between Polytec Holding and Warimpex Finanz
Assuming the 90 days trading horizon Polytec Holding AG is expected to under-perform the Warimpex Finanz. But the stock apears to be less risky and, when comparing its historical volatility, Polytec Holding AG is 1.96 times less risky than Warimpex Finanz. The stock trades about -0.1 of its potential returns per unit of risk. The Warimpex Finanz und is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 71.00 in Warimpex Finanz und on August 26, 2024 and sell it today you would lose (13.00) from holding Warimpex Finanz und or give up 18.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polytec Holding AG vs. Warimpex Finanz und
Performance |
| Timeline |
| Polytec Holding AG |
| Warimpex Finanz und |
Polytec Holding and Warimpex Finanz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polytec Holding and Warimpex Finanz
The main advantage of trading using opposite Polytec Holding and Warimpex Finanz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polytec Holding position performs unexpectedly, Warimpex Finanz 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 Warimpex Finanz will offset losses from the drop in Warimpex Finanz's long position.| Polytec Holding vs. Voestalpine AG | Polytec Holding vs. AT S Austria | Polytec Holding vs. Andritz AG | Polytec Holding vs. Schoeller Bleckmann Oilfield Equipment |
| Warimpex Finanz vs. IMMOFINANZ AG | Warimpex Finanz vs. S IMMO AG | Warimpex Finanz vs. Zumtobel Group AG | Warimpex Finanz vs. UNIQA Insurance Group |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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