Correlation Between Zumtobel Group and Polytec Holding
Can any of the company-specific risk be diversified away by investing in both Zumtobel Group and Polytec Holding 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 Polytec Holding 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 Polytec Holding AG, you can compare the effects of market volatilities on Zumtobel Group and Polytec Holding 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 Polytec Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zumtobel Group and Polytec Holding.
Diversification Opportunities for Zumtobel Group and Polytec Holding
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zumtobel and Polytec is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Zumtobel Group AG and Polytec Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polytec Holding 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 Polytec Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polytec Holding AG has no effect on the direction of Zumtobel Group i.e., Zumtobel Group and Polytec Holding go up and down completely randomly.
Pair Corralation between Zumtobel Group and Polytec Holding
Assuming the 90 days trading horizon Zumtobel Group AG is expected to generate 0.93 times more return on investment than Polytec Holding. However, Zumtobel Group AG is 1.08 times less risky than Polytec Holding. It trades about -0.03 of its potential returns per unit of risk. Polytec Holding AG is currently generating about -0.09 per unit of risk. If you would invest 652.00 in Zumtobel Group AG on August 26, 2024 and sell it today you would lose (154.00) from holding Zumtobel Group AG or give up 23.62% 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. Polytec Holding AG
Performance |
| Timeline |
| Zumtobel Group AG |
| Polytec Holding AG |
Zumtobel Group and Polytec Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zumtobel Group and Polytec Holding
The main advantage of trading using opposite Zumtobel Group and Polytec Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zumtobel Group position performs unexpectedly, Polytec Holding 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 Polytec Holding will offset losses from the drop in Polytec Holding's long position.| Zumtobel Group vs. Voestalpine AG | Zumtobel Group vs. Andritz AG | Zumtobel Group vs. Wienerberger AG | Zumtobel Group vs. Lenzing Aktiengesellschaft |
| Polytec Holding vs. Voestalpine AG | Polytec Holding vs. AT S Austria | Polytec Holding vs. Andritz AG | Polytec Holding vs. Schoeller Bleckmann Oilfield Equipment |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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