Correlation Between Voestalpine and DO Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Voestalpine and DO 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 Voestalpine and DO Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voestalpine AG and DO Aktiengesellschaft, you can compare the effects of market volatilities on Voestalpine and DO 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 Voestalpine with a short position of DO Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voestalpine and DO Aktiengesellscha.
Diversification Opportunities for Voestalpine and DO Aktiengesellscha
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Voestalpine and DOC is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Voestalpine AG and DO Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DO Aktiengesellschaft and Voestalpine 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 Voestalpine AG are associated (or correlated) with DO Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DO Aktiengesellschaft has no effect on the direction of Voestalpine i.e., Voestalpine and DO Aktiengesellscha go up and down completely randomly.
Pair Corralation between Voestalpine and DO Aktiengesellscha
Assuming the 90 days trading horizon Voestalpine AG is expected to under-perform the DO Aktiengesellscha. But the stock apears to be less risky and, when comparing its historical volatility, Voestalpine AG is 1.92 times less risky than DO Aktiengesellscha. The stock trades about -0.19 of its potential returns per unit of risk. The DO Aktiengesellschaft is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 14,500 in DO Aktiengesellschaft on August 30, 2024 and sell it today you would earn a total of 1,900 from holding DO Aktiengesellschaft or generate 13.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voestalpine AG vs. DO Aktiengesellschaft
Performance |
| Timeline |
| Voestalpine AG |
| DO Aktiengesellschaft |
Voestalpine and DO Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voestalpine and DO Aktiengesellscha
The main advantage of trading using opposite Voestalpine and DO Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voestalpine position performs unexpectedly, DO 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 DO Aktiengesellscha will offset losses from the drop in DO Aktiengesellscha's long position.| Voestalpine vs. OMV Aktiengesellschaft | Voestalpine vs. Raiffeisen Bank International | Voestalpine vs. Andritz AG | Voestalpine vs. VERBUND AG |
| DO Aktiengesellscha vs. Lenzing Aktiengesellschaft | DO Aktiengesellscha vs. Schoeller Bleckmann Oilfield Equipment | DO Aktiengesellscha vs. Andritz AG | DO 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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