Correlation Between RATH Aktiengesellscha and Telekom Austria
Can any of the company-specific risk be diversified away by investing in both RATH Aktiengesellscha and Telekom Austria 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 Telekom Austria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RATH Aktiengesellschaft and Telekom Austria AG, you can compare the effects of market volatilities on RATH Aktiengesellscha and Telekom Austria 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 Telekom Austria. Check out your portfolio center. Please also check ongoing floating volatility patterns of RATH Aktiengesellscha and Telekom Austria.
Diversification Opportunities for RATH Aktiengesellscha and Telekom Austria
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between RATH and Telekom is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding RATH Aktiengesellschaft and Telekom Austria AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telekom Austria 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 Telekom Austria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telekom Austria AG has no effect on the direction of RATH Aktiengesellscha i.e., RATH Aktiengesellscha and Telekom Austria go up and down completely randomly.
Pair Corralation between RATH Aktiengesellscha and Telekom Austria
Assuming the 90 days trading horizon RATH Aktiengesellschaft is expected to under-perform the Telekom Austria. But the stock apears to be less risky and, when comparing its historical volatility, RATH Aktiengesellschaft is 1.6 times less risky than Telekom Austria. The stock trades about -0.12 of its potential returns per unit of risk. The Telekom Austria AG is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 870.00 in Telekom Austria AG on August 24, 2024 and sell it today you would lose (90.00) from holding Telekom Austria AG or give up 10.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RATH Aktiengesellschaft vs. Telekom Austria AG
Performance |
| Timeline |
| RATH Aktiengesellschaft |
| Telekom Austria AG |
RATH Aktiengesellscha and Telekom Austria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RATH Aktiengesellscha and Telekom Austria
The main advantage of trading using opposite RATH Aktiengesellscha and Telekom Austria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RATH Aktiengesellscha position performs unexpectedly, Telekom Austria 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 Telekom Austria will offset losses from the drop in Telekom Austria's long position.| RATH Aktiengesellscha vs. AT S Austria | RATH Aktiengesellscha vs. BAWAG Group AG | RATH Aktiengesellscha vs. Semperit Aktiengesellschaft Holding | RATH Aktiengesellscha vs. Telekom Austria AG |
| Telekom Austria vs. Voestalpine AG | Telekom Austria vs. Oesterr Post AG | Telekom Austria vs. Wienerberger AG | Telekom Austria vs. VERBUND 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 CEOs Directory module to screen CEOs from public companies around the world.
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