Correlation Between RATH Aktiengesellscha and Palfinger
Can any of the company-specific risk be diversified away by investing in both RATH Aktiengesellscha and Palfinger 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 RATH Aktiengesellscha and Palfinger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RATH Aktiengesellschaft and Palfinger AG, you can compare the effects of market volatilities on RATH Aktiengesellscha and Palfinger 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 RATH Aktiengesellscha with a short position of Palfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of RATH Aktiengesellscha and Palfinger.
Diversification Opportunities for RATH Aktiengesellscha and Palfinger
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RATH and Palfinger is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding RATH Aktiengesellschaft and Palfinger AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palfinger AG and RATH Aktiengesellscha 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 RATH Aktiengesellschaft are associated (or correlated) with Palfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palfinger AG has no effect on the direction of RATH Aktiengesellscha i.e., RATH Aktiengesellscha and Palfinger go up and down completely randomly.
Pair Corralation between RATH Aktiengesellscha and Palfinger
Assuming the 90 days trading horizon RATH Aktiengesellschaft is expected to generate 1.07 times more return on investment than Palfinger. However, RATH Aktiengesellscha is 1.07 times more volatile than Palfinger AG. It trades about -0.06 of its potential returns per unit of risk. Palfinger AG is currently generating about -0.07 per unit of risk. If you would invest 3,020 in RATH Aktiengesellschaft on August 27, 2024 and sell it today you would lose (520.00) from holding RATH Aktiengesellschaft or give up 17.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
RATH Aktiengesellschaft vs. Palfinger AG
Performance |
| Timeline |
| RATH Aktiengesellschaft |
| Palfinger AG |
RATH Aktiengesellscha and Palfinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RATH Aktiengesellscha and Palfinger
The main advantage of trading using opposite RATH Aktiengesellscha and Palfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RATH Aktiengesellscha position performs unexpectedly, Palfinger 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 Palfinger will offset losses from the drop in Palfinger's long position.| RATH Aktiengesellscha vs. Oberbank AG | RATH Aktiengesellscha vs. Semperit Aktiengesellschaft Holding | RATH Aktiengesellscha vs. Telekom Austria AG | RATH Aktiengesellscha vs. Oesterr Post AG |
| Palfinger vs. RATH Aktiengesellschaft | Palfinger vs. Semperit Aktiengesellschaft Holding | Palfinger vs. Oesterr Post AG | Palfinger vs. Anheuser Busch InBev SANV |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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