Correlation Between Wizz Air and Varta AG
Can any of the company-specific risk be diversified away by investing in both Wizz Air and Varta 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 Varta 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 Varta AG, you can compare the effects of market volatilities on Wizz Air and Varta 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 Varta AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Varta AG.
Diversification Opportunities for Wizz Air and Varta AG
Good diversification
The 3 months correlation between Wizz and Varta is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and Varta AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Varta 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 Varta AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Varta AG has no effect on the direction of Wizz Air i.e., Wizz Air and Varta AG go up and down completely randomly.
Pair Corralation between Wizz Air and Varta AG
Assuming the 90 days trading horizon Wizz Air Holdings is expected to generate 0.49 times more return on investment than Varta AG. However, Wizz Air Holdings is 2.06 times less risky than Varta AG. It trades about 0.01 of its potential returns per unit of risk. Varta AG is currently generating about -0.2 per unit of risk. If you would invest 1,709 in Wizz Air Holdings on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Wizz Air Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. Varta AG
Performance |
| Timeline |
| Wizz Air Holdings |
| Varta AG |
Wizz Air and Varta AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and Varta AG
The main advantage of trading using opposite Wizz Air and Varta AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air position performs unexpectedly, Varta 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 Varta AG will offset losses from the drop in Varta AG's long position.The idea behind Wizz Air Holdings and Varta AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Varta AG vs. Kaiser Aluminum | Varta AG vs. ANGLER GAMING PLC | Varta AG vs. Hochschild Mining plc | Varta AG vs. LION ONE METALS |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |