Correlation Between Zumtobel Group and Andritz AG
Can any of the company-specific risk be diversified away by investing in both Zumtobel Group and Andritz 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 Zumtobel Group and Andritz AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zumtobel Group AG and Andritz AG, you can compare the effects of market volatilities on Zumtobel Group and Andritz 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 Zumtobel Group with a short position of Andritz AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zumtobel Group and Andritz AG.
Diversification Opportunities for Zumtobel Group and Andritz AG
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zumtobel and Andritz is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Zumtobel Group AG and Andritz AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andritz AG and Zumtobel Group 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 Zumtobel Group AG are associated (or correlated) with Andritz AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andritz AG has no effect on the direction of Zumtobel Group i.e., Zumtobel Group and Andritz AG go up and down completely randomly.
Pair Corralation between Zumtobel Group and Andritz AG
Assuming the 90 days trading horizon Zumtobel Group AG is expected to under-perform the Andritz AG. In addition to that, Zumtobel Group is 1.09 times more volatile than Andritz AG. It trades about -0.04 of its total potential returns per unit of risk. Andritz AG is currently generating about 0.02 per unit of volatility. If you would invest 5,120 in Andritz AG on September 2, 2024 and sell it today you would earn a total of 170.00 from holding Andritz AG or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zumtobel Group AG vs. Andritz AG
Performance |
| Timeline |
| Zumtobel Group AG |
| Andritz AG |
Zumtobel Group and Andritz AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zumtobel Group and Andritz AG
The main advantage of trading using opposite Zumtobel Group and Andritz AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zumtobel Group position performs unexpectedly, Andritz 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 Andritz AG will offset losses from the drop in Andritz AG's long position.| Zumtobel Group vs. Voestalpine AG | Zumtobel Group vs. Andritz AG | Zumtobel Group vs. Wienerberger AG | Zumtobel Group vs. Lenzing Aktiengesellschaft |
| Andritz AG vs. Voestalpine AG | Andritz AG vs. VERBUND AG | Andritz AG vs. OMV Aktiengesellschaft | Andritz AG vs. Wienerberger 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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