Correlation Between Telekom Austria and Semperit Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Telekom Austria and Semperit Aktiengesellscha 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 Telekom Austria and Semperit Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telekom Austria AG and Semperit Aktiengesellschaft Holding, you can compare the effects of market volatilities on Telekom Austria and Semperit Aktiengesellscha 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 Telekom Austria with a short position of Semperit Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telekom Austria and Semperit Aktiengesellscha.
Diversification Opportunities for Telekom Austria and Semperit Aktiengesellscha
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Telekom and Semperit is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Telekom Austria AG and Semperit Aktiengesellschaft Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semperit Aktiengesellscha and Telekom Austria 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 Telekom Austria AG are associated (or correlated) with Semperit Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semperit Aktiengesellscha has no effect on the direction of Telekom Austria i.e., Telekom Austria and Semperit Aktiengesellscha go up and down completely randomly.
Pair Corralation between Telekom Austria and Semperit Aktiengesellscha
Assuming the 90 days trading horizon Telekom Austria AG is expected to under-perform the Semperit Aktiengesellscha. In addition to that, Telekom Austria is 1.44 times more volatile than Semperit Aktiengesellschaft Holding. It trades about -0.06 of its total potential returns per unit of risk. Semperit Aktiengesellschaft Holding is currently generating about 0.03 per unit of volatility. If you would invest 1,150 in Semperit Aktiengesellschaft Holding on August 23, 2024 and sell it today you would earn a total of 6.00 from holding Semperit Aktiengesellschaft Holding or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telekom Austria AG vs. Semperit Aktiengesellschaft Ho
Performance |
| Timeline |
| Telekom Austria AG |
| Semperit Aktiengesellscha |
Telekom Austria and Semperit Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telekom Austria and Semperit Aktiengesellscha
The main advantage of trading using opposite Telekom Austria and Semperit Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telekom Austria position performs unexpectedly, Semperit Aktiengesellscha 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 Semperit Aktiengesellscha will offset losses from the drop in Semperit Aktiengesellscha's long position.| Telekom Austria vs. Voestalpine AG | Telekom Austria vs. Oesterr Post AG | Telekom Austria vs. Wienerberger AG | Telekom Austria vs. VERBUND AG |
| Semperit Aktiengesellscha vs. Wienerberger AG | Semperit Aktiengesellscha vs. Andritz AG | Semperit Aktiengesellscha vs. Lenzing Aktiengesellschaft | Semperit Aktiengesellscha vs. Voestalpine 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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