Correlation Between S IMMO and IMMOFINANZ
Can any of the company-specific risk be diversified away by investing in both S IMMO and IMMOFINANZ 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 S IMMO and IMMOFINANZ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between S IMMO AG and IMMOFINANZ AG, you can compare the effects of market volatilities on S IMMO and IMMOFINANZ 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 S IMMO with a short position of IMMOFINANZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of S IMMO and IMMOFINANZ.
Diversification Opportunities for S IMMO and IMMOFINANZ
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPI and IMMOFINANZ is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding S IMMO AG and IMMOFINANZ AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMMOFINANZ AG and S IMMO 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 S IMMO AG are associated (or correlated) with IMMOFINANZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMMOFINANZ AG has no effect on the direction of S IMMO i.e., S IMMO and IMMOFINANZ go up and down completely randomly.
Pair Corralation between S IMMO and IMMOFINANZ
Assuming the 90 days trading horizon S IMMO AG is expected to generate 0.88 times more return on investment than IMMOFINANZ. However, S IMMO AG is 1.13 times less risky than IMMOFINANZ. It trades about 0.07 of its potential returns per unit of risk. IMMOFINANZ AG is currently generating about 0.03 per unit of risk. If you would invest 1,312 in S IMMO AG on August 26, 2024 and sell it today you would earn a total of 898.00 from holding S IMMO AG or generate 68.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
S IMMO AG vs. IMMOFINANZ AG
Performance |
| Timeline |
| S IMMO AG |
| IMMOFINANZ AG |
S IMMO and IMMOFINANZ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S IMMO and IMMOFINANZ
The main advantage of trading using opposite S IMMO and IMMOFINANZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S IMMO position performs unexpectedly, IMMOFINANZ 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 IMMOFINANZ will offset losses from the drop in IMMOFINANZ's long position.| S IMMO vs. AMAG Austria Metall | S IMMO vs. Vienna Insurance Group | S IMMO vs. Oberbank AG | S IMMO vs. Addiko Bank AG |
| IMMOFINANZ vs. CA Immobilien Anlagen | IMMOFINANZ vs. S IMMO AG | IMMOFINANZ vs. Voestalpine AG | IMMOFINANZ vs. Raiffeisen Bank International |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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