Correlation Between Polytec Holding and Oesterr Post

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

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

Diversification Opportunities for Polytec Holding and Oesterr Post

0.8

Correlation Coefficient

Polytec Holding  Oesterr Post

Very poor diversification

The 3 months correlation between Polytec and Oesterr is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Polytec Holding AG and Oesterr Post AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oesterr Post AG and Polytec Holding 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 Polytec Holding AG are associated (or correlated) with Oesterr Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oesterr Post AG has no effect on the direction of Polytec Holding i.e., Polytec Holding and Oesterr Post go up and down completely randomly.

Pair Corralation between Polytec Holding and Oesterr Post

Assuming the 90 days trading horizon Polytec Holding AG is expected to under-perform the Oesterr Post. In addition to that, Polytec Holding is 3.1 times more volatile than Oesterr Post AG. It trades about -0.22 of its total potential returns per unit of risk. Oesterr Post AG is currently generating about -0.04 per unit of volatility. If you would invest  2,940  in Oesterr Post AG on September 1, 2024 and sell it today you would lose (60.00) from holding Oesterr Post AG or give up 2.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.48%
Values	Daily Returns

Polytec Holding AG  vs.  Oesterr Post AG

Polytec Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polytec Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Oesterr Post AG

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Polytec Holding and Oesterr Post

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

The idea behind Polytec Holding AG and Oesterr Post 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.