Correlation Between WIZZ AIR and AMAG AUSTRIA
Can any of the company-specific risk be diversified away by investing in both WIZZ AIR and AMAG AUSTRIA 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 AMAG AUSTRIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIZZ AIR HLDGUNSPADR4 and AMAG AUSTRIA M, you can compare the effects of market volatilities on WIZZ AIR and AMAG AUSTRIA 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 AMAG AUSTRIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIZZ AIR and AMAG AUSTRIA.
Diversification Opportunities for WIZZ AIR and AMAG AUSTRIA
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between WIZZ and AMAG is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding WIZZ AIR HLDGUNSPADR4 and AMAG AUSTRIA M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG AUSTRIA M 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 HLDGUNSPADR4 are associated (or correlated) with AMAG AUSTRIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG AUSTRIA M has no effect on the direction of WIZZ AIR i.e., WIZZ AIR and AMAG AUSTRIA go up and down completely randomly.
Pair Corralation between WIZZ AIR and AMAG AUSTRIA
Assuming the 90 days trading horizon WIZZ AIR HLDGUNSPADR4 is expected to generate 3.61 times more return on investment than AMAG AUSTRIA. However, WIZZ AIR is 3.61 times more volatile than AMAG AUSTRIA M. It trades about -0.08 of its potential returns per unit of risk. AMAG AUSTRIA M is currently generating about -0.32 per unit of risk. If you would invest 408.00 in WIZZ AIR HLDGUNSPADR4 on August 31, 2024 and sell it today you would lose (32.00) from holding WIZZ AIR HLDGUNSPADR4 or give up 7.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIZZ AIR HLDGUNSPADR4 vs. AMAG AUSTRIA M
Performance |
| Timeline |
| WIZZ AIR HLDGUNSPADR4 |
| AMAG AUSTRIA M |
WIZZ AIR and AMAG AUSTRIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIZZ AIR and AMAG AUSTRIA
The main advantage of trading using opposite WIZZ AIR and AMAG AUSTRIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIZZ AIR position performs unexpectedly, AMAG AUSTRIA 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 AMAG AUSTRIA will offset losses from the drop in AMAG AUSTRIA's long position.| WIZZ AIR vs. UET United Electronic | WIZZ AIR vs. CHEMICAL INDUSTRIES | WIZZ AIR vs. Nucletron Electronic Aktiengesellschaft | WIZZ AIR vs. AOI Electronics Co |
| AMAG AUSTRIA vs. SIVERS SEMICONDUCTORS AB | AMAG AUSTRIA vs. Darden Restaurants | AMAG AUSTRIA vs. Reliance Steel Aluminum | AMAG AUSTRIA vs. Q2M Managementberatung 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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