Correlation Between Voestalpine and Polytec Holding
Can any of the company-specific risk be diversified away by investing in both Voestalpine and Polytec Holding 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 Polytec Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voestalpine AG and Polytec Holding AG, you can compare the effects of market volatilities on Voestalpine and Polytec Holding 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 Polytec Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voestalpine and Polytec Holding.
Diversification Opportunities for Voestalpine and Polytec Holding
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voestalpine and Polytec is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Voestalpine AG and Polytec Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polytec Holding AG 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 Polytec Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polytec Holding AG has no effect on the direction of Voestalpine i.e., Voestalpine and Polytec Holding go up and down completely randomly.
Pair Corralation between Voestalpine and Polytec Holding
Assuming the 90 days trading horizon Voestalpine AG is expected to generate 1.0 times more return on investment than Polytec Holding. However, Voestalpine is 1.0 times more volatile than Polytec Holding AG. It trades about -0.03 of its potential returns per unit of risk. Polytec Holding AG is currently generating about -0.08 per unit of risk. If you would invest 2,394 in Voestalpine AG on August 30, 2024 and sell it today you would lose (598.00) from holding Voestalpine AG or give up 24.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voestalpine AG vs. Polytec Holding AG
Performance |
| Timeline |
| Voestalpine AG |
| Polytec Holding AG |
Voestalpine and Polytec Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voestalpine and Polytec Holding
The main advantage of trading using opposite Voestalpine and Polytec Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voestalpine position performs unexpectedly, Polytec Holding 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 Polytec Holding will offset losses from the drop in Polytec Holding's long position.| Voestalpine vs. OMV Aktiengesellschaft | Voestalpine vs. Raiffeisen Bank International | Voestalpine vs. Andritz AG | Voestalpine vs. VERBUND AG |
| Polytec Holding vs. Voestalpine AG | Polytec Holding vs. AT S Austria | Polytec Holding vs. Andritz AG | Polytec Holding vs. Schoeller Bleckmann Oilfield Equipment |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |