Correlation Between Wizz Air and Aurubis AG
Can any of the company-specific risk be diversified away by investing in both Wizz Air and Aurubis 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 Wizz Air and Aurubis AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wizz Air Holdings and Aurubis AG, you can compare the effects of market volatilities on Wizz Air and Aurubis 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 Wizz Air with a short position of Aurubis AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Aurubis AG.
Diversification Opportunities for Wizz Air and Aurubis AG
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wizz and Aurubis is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and Aurubis AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurubis AG and Wizz Air 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 Wizz Air Holdings are associated (or correlated) with Aurubis AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurubis AG has no effect on the direction of Wizz Air i.e., Wizz Air and Aurubis AG go up and down completely randomly.
Pair Corralation between Wizz Air and Aurubis AG
Assuming the 90 days trading horizon Wizz Air Holdings is expected to under-perform the Aurubis AG. In addition to that, Wizz Air is 1.47 times more volatile than Aurubis AG. It trades about -0.02 of its total potential returns per unit of risk. Aurubis AG is currently generating about -0.01 per unit of volatility. If you would invest 9,722 in Aurubis AG on October 25, 2024 and sell it today you would lose (2,402) from holding Aurubis AG or give up 24.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. Aurubis AG
Performance |
| Timeline |
| Wizz Air Holdings |
| Aurubis AG |
Wizz Air and Aurubis AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and Aurubis AG
The main advantage of trading using opposite Wizz Air and Aurubis AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air position performs unexpectedly, Aurubis 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 Aurubis AG will offset losses from the drop in Aurubis AG's long position.| Wizz Air vs. SIDETRADE EO 1 | Wizz Air vs. FLOW TRADERS LTD | Wizz Air vs. CODERE ONLINE LUX | Wizz Air vs. Canon Marketing Japan |
| Aurubis AG vs. VIRGIN WINES UK | Aurubis AG vs. FAST RETAIL ADR | Aurubis AG vs. H2O Retailing | Aurubis AG vs. CarsalesCom |
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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