Correlation Between VIAPLAY GROUP and AlzChem Group

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

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

Diversification Opportunities for VIAPLAY GROUP and AlzChem Group

-0.53

Correlation Coefficient

VIAPLAY GROUP  AlzChem Group

Excellent diversification

The 3 months correlation between VIAPLAY and AlzChem is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding VIAPLAY GROUP AB and AlzChem Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlzChem Group AG and VIAPLAY 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 VIAPLAY GROUP AB are associated (or correlated) with AlzChem Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlzChem Group AG has no effect on the direction of VIAPLAY GROUP i.e., VIAPLAY GROUP and AlzChem Group go up and down completely randomly.

Pair Corralation between VIAPLAY GROUP and AlzChem Group

Assuming the 90 days horizon VIAPLAY GROUP AB is expected to under-perform the AlzChem Group. In addition to that, VIAPLAY GROUP is 1.04 times more volatile than AlzChem Group AG. It trades about -0.2 of its total potential returns per unit of risk. AlzChem Group AG is currently generating about -0.03 per unit of volatility. If you would invest  5,900  in AlzChem Group AG on September 27, 2024 and sell it today you would lose (220.00) from holding AlzChem Group AG or give up 3.73% of portfolio value over 90 days.

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

VIAPLAY GROUP AB  vs.  AlzChem Group AG

VIAPLAY GROUP AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIAPLAY GROUP AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

AlzChem Group AG

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AlzChem Group AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AlzChem Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VIAPLAY GROUP and AlzChem Group

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

The idea behind VIAPLAY GROUP AB and AlzChem Group 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.