Correlation Between Exor NV and Oberbank

Can any of the company-specific risk be diversified away by investing in both Exor NV and Oberbank 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 Exor NV and Oberbank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Exor NV and Oberbank AG, you can compare the effects of market volatilities on Exor NV and Oberbank 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 Exor NV with a short position of Oberbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exor NV and Oberbank.

Diversification Opportunities for Exor NV and Oberbank

-0.72

Correlation Coefficient

Exor NV  Oberbank

Pay attention - limited upside

The 3 months correlation between Exor and Oberbank is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Exor NV and Oberbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberbank AG and Exor NV 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 Exor NV are associated (or correlated) with Oberbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberbank AG has no effect on the direction of Exor NV i.e., Exor NV and Oberbank go up and down completely randomly.

Pair Corralation between Exor NV and Oberbank

Assuming the 90 days trading horizon Exor NV is expected to under-perform the Oberbank. In addition to that, Exor NV is 13.36 times more volatile than Oberbank AG. It trades about -0.08 of its total potential returns per unit of risk. Oberbank AG is currently generating about 0.14 per unit of volatility. If you would invest  7,000  in Oberbank AG on September 3, 2024 and sell it today you would earn a total of  60.00  from holding Oberbank AG or generate 0.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Exor NV  vs.  Oberbank AG

Exor NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exor NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Exor NV is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Oberbank AG

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oberbank AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Oberbank is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Exor NV and Oberbank

The main advantage of trading using opposite Exor NV and Oberbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exor NV position performs unexpectedly, Oberbank 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 Oberbank will offset losses from the drop in Oberbank's long position.

The idea behind Exor NV and Oberbank AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.