Correlation Between Voestalpine and Gurktaler Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Voestalpine and Gurktaler 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 Gurktaler 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 Gurktaler Aktiengesellschaft, you can compare the effects of market volatilities on Voestalpine and Gurktaler 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 Gurktaler Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voestalpine and Gurktaler Aktiengesellscha.
Diversification Opportunities for Voestalpine and Gurktaler Aktiengesellscha
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voestalpine and Gurktaler is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Voestalpine AG and Gurktaler Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gurktaler Aktiengesellscha 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 Gurktaler Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gurktaler Aktiengesellscha has no effect on the direction of Voestalpine i.e., Voestalpine and Gurktaler Aktiengesellscha go up and down completely randomly.
Pair Corralation between Voestalpine and Gurktaler Aktiengesellscha
Assuming the 90 days trading horizon Voestalpine is expected to generate 1.11 times less return on investment than Gurktaler Aktiengesellscha. In addition to that, Voestalpine is 1.31 times more volatile than Gurktaler Aktiengesellschaft. It trades about 0.23 of its total potential returns per unit of risk. Gurktaler Aktiengesellschaft is currently generating about 0.33 per unit of volatility. If you would invest 780.00 in Gurktaler Aktiengesellschaft on November 28, 2024 and sell it today you would earn a total of 100.00 from holding Gurktaler Aktiengesellschaft or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voestalpine AG vs. Gurktaler Aktiengesellschaft
Performance |
| Timeline |
| Voestalpine AG |
| Gurktaler Aktiengesellscha |
Voestalpine and Gurktaler Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voestalpine and Gurktaler Aktiengesellscha
The main advantage of trading using opposite Voestalpine and Gurktaler Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voestalpine position performs unexpectedly, Gurktaler 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 Gurktaler Aktiengesellscha will offset losses from the drop in Gurktaler Aktiengesellscha's long position.| Voestalpine vs. OMV Aktiengesellschaft | Voestalpine vs. Raiffeisen Bank International | Voestalpine vs. Andritz AG | Voestalpine vs. VERBUND 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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