Correlation Between VERBUND AG and EVN AG
Can any of the company-specific risk be diversified away by investing in both VERBUND AG and EVN AG 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 VERBUND AG and EVN AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VERBUND AG and EVN AG, you can compare the effects of market volatilities on VERBUND AG and EVN AG 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 VERBUND AG with a short position of EVN AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of VERBUND AG and EVN AG.
Diversification Opportunities for VERBUND AG and EVN AG
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VERBUND and EVN is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding VERBUND AG and EVN AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVN AG and VERBUND AG 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 VERBUND AG are associated (or correlated) with EVN AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVN AG has no effect on the direction of VERBUND AG i.e., VERBUND AG and EVN AG go up and down completely randomly.
Pair Corralation between VERBUND AG and EVN AG
Assuming the 90 days trading horizon VERBUND AG is expected to under-perform the EVN AG. In addition to that, VERBUND AG is 1.48 times more volatile than EVN AG. It trades about 0.0 of its total potential returns per unit of risk. EVN AG is currently generating about 0.06 per unit of volatility. If you would invest 1,780 in EVN AG on August 30, 2024 and sell it today you would earn a total of 665.00 from holding EVN AG or generate 37.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VERBUND AG vs. EVN AG
Performance |
| Timeline |
| VERBUND AG |
| EVN AG |
VERBUND AG and EVN AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VERBUND AG and EVN AG
The main advantage of trading using opposite VERBUND AG and EVN AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VERBUND AG position performs unexpectedly, EVN AG 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 EVN AG will offset losses from the drop in EVN AG's long position.| VERBUND AG vs. OMV Aktiengesellschaft | VERBUND AG vs. Voestalpine AG | VERBUND AG vs. Wienerberger AG | VERBUND AG vs. EVN 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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