Correlation Between Stadler Rail and Implenia
Can any of the company-specific risk be diversified away by investing in both Stadler Rail and Implenia 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 Stadler Rail and Implenia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stadler Rail AG and Implenia AG, you can compare the effects of market volatilities on Stadler Rail and Implenia 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 Stadler Rail with a short position of Implenia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stadler Rail and Implenia.
Diversification Opportunities for Stadler Rail and Implenia
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stadler and Implenia is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Stadler Rail AG and Implenia AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Implenia AG and Stadler Rail 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 Stadler Rail AG are associated (or correlated) with Implenia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Implenia AG has no effect on the direction of Stadler Rail i.e., Stadler Rail and Implenia go up and down completely randomly.
Pair Corralation between Stadler Rail and Implenia
Assuming the 90 days trading horizon Stadler Rail AG is expected to under-perform the Implenia. But the stock apears to be less risky and, when comparing its historical volatility, Stadler Rail AG is 1.35 times less risky than Implenia. The stock trades about -0.06 of its potential returns per unit of risk. The Implenia AG is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,888 in Implenia AG on November 27, 2024 and sell it today you would lose (28.00) from holding Implenia AG or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stadler Rail AG vs. Implenia AG
Performance |
| Timeline |
| Stadler Rail AG |
| Implenia AG |
Stadler Rail and Implenia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stadler Rail and Implenia
The main advantage of trading using opposite Stadler Rail and Implenia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stadler Rail position performs unexpectedly, Implenia 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 Implenia will offset losses from the drop in Implenia's long position.| Stadler Rail vs. Logitech International SA | Stadler Rail vs. Swiss Life Holding | Stadler Rail vs. Swiss Re AG | Stadler Rail vs. Geberit AG |
| Implenia vs. Helvetia Holding AG | Implenia vs. Bucher Industries AG | Implenia vs. Hubersuhner AG | Implenia vs. Stadler Rail 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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