Correlation Between Zumtobel Group and Kapsch Traffic
Can any of the company-specific risk be diversified away by investing in both Zumtobel Group and Kapsch Traffic 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 Kapsch Traffic 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 Kapsch Traffic, you can compare the effects of market volatilities on Zumtobel Group and Kapsch Traffic 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 Kapsch Traffic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zumtobel Group and Kapsch Traffic.
Diversification Opportunities for Zumtobel Group and Kapsch Traffic
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zumtobel and Kapsch is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Zumtobel Group AG and Kapsch Traffic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kapsch Traffic 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 Kapsch Traffic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kapsch Traffic has no effect on the direction of Zumtobel Group i.e., Zumtobel Group and Kapsch Traffic go up and down completely randomly.
Pair Corralation between Zumtobel Group and Kapsch Traffic
Assuming the 90 days trading horizon Zumtobel Group AG is expected to generate 1.17 times more return on investment than Kapsch Traffic. However, Zumtobel Group is 1.17 times more volatile than Kapsch Traffic. It trades about -0.04 of its potential returns per unit of risk. Kapsch Traffic is currently generating about -0.09 per unit of risk. If you would invest 597.00 in Zumtobel Group AG on September 2, 2024 and sell it today you would lose (119.00) from holding Zumtobel Group AG or give up 19.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zumtobel Group AG vs. Kapsch Traffic
Performance |
| Timeline |
| Zumtobel Group AG |
| Kapsch Traffic |
Zumtobel Group and Kapsch Traffic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zumtobel Group and Kapsch Traffic
The main advantage of trading using opposite Zumtobel Group and Kapsch Traffic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zumtobel Group position performs unexpectedly, Kapsch Traffic 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 Kapsch Traffic will offset losses from the drop in Kapsch Traffic's long position.| Zumtobel Group vs. Voestalpine AG | Zumtobel Group vs. Andritz AG | Zumtobel Group vs. Wienerberger AG | Zumtobel Group vs. Lenzing Aktiengesellschaft |
| Kapsch Traffic vs. Lenzing Aktiengesellschaft | Kapsch Traffic vs. Vienna Insurance Group | Kapsch Traffic vs. Semperit Aktiengesellschaft Holding | Kapsch Traffic vs. EVN 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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