Correlation Between Augwind Energy and Netz Hotels
Can any of the company-specific risk be diversified away by investing in both Augwind Energy and Netz Hotels 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 Augwind Energy and Netz Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Augwind Energy Tech and Netz Hotels, you can compare the effects of market volatilities on Augwind Energy and Netz Hotels 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 Augwind Energy with a short position of Netz Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Augwind Energy and Netz Hotels.
Diversification Opportunities for Augwind Energy and Netz Hotels
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Augwind and Netz is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Augwind Energy Tech and Netz Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netz Hotels and Augwind Energy 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 Augwind Energy Tech are associated (or correlated) with Netz Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netz Hotels has no effect on the direction of Augwind Energy i.e., Augwind Energy and Netz Hotels go up and down completely randomly.
Pair Corralation between Augwind Energy and Netz Hotels
Assuming the 90 days trading horizon Augwind Energy Tech is expected to generate 1.2 times more return on investment than Netz Hotels. However, Augwind Energy is 1.2 times more volatile than Netz Hotels. It trades about 0.28 of its potential returns per unit of risk. Netz Hotels is currently generating about 0.26 per unit of risk. If you would invest 28,880 in Augwind Energy Tech on September 28, 2024 and sell it today you would earn a total of 26,120 from holding Augwind Energy Tech or generate 90.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Augwind Energy Tech vs. Netz Hotels
Performance |
Timeline |
Augwind Energy Tech |
Netz Hotels |
Augwind Energy and Netz Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Augwind Energy and Netz Hotels
The main advantage of trading using opposite Augwind Energy and Netz Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Augwind Energy position performs unexpectedly, Netz Hotels 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 Netz Hotels will offset losses from the drop in Netz Hotels' long position.Augwind Energy vs. Aquarius Engines AM | Augwind Energy vs. Highcon Systems | Augwind Energy vs. FMS Enterprises Migun | Augwind Energy vs. Carmit |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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