Correlation Between Semperit Aktiengesellscha and VERBUND AG

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

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

Diversification Opportunities for Semperit Aktiengesellscha and VERBUND AG

-0.23

Correlation Coefficient

Semperit Aktiengesellscha  VERBUND AG

Very good diversification

The 3 months correlation between Semperit and VERBUND is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Semperit Aktiengesellschaft Ho and VERBUND AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VERBUND AG and Semperit Aktiengesellscha 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 Semperit Aktiengesellschaft Holding are associated (or correlated) with VERBUND AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VERBUND AG has no effect on the direction of Semperit Aktiengesellscha i.e., Semperit Aktiengesellscha and VERBUND AG go up and down completely randomly.

Pair Corralation between Semperit Aktiengesellscha and VERBUND AG

Assuming the 90 days trading horizon Semperit Aktiengesellschaft Holding is expected to generate 0.78 times more return on investment than VERBUND AG. However, Semperit Aktiengesellschaft Holding is 1.27 times less risky than VERBUND AG. It trades about 0.01 of its potential returns per unit of risk. VERBUND AG is currently generating about -0.03 per unit of risk. If you would invest  1,170  in Semperit Aktiengesellschaft Holding on September 14, 2024 and sell it today you would earn a total of  8.00  from holding Semperit Aktiengesellschaft Holding or generate 0.68% return on investment over 90 days.

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

Semperit Aktiengesellschaft Ho  vs.  VERBUND AG

Semperit Aktiengesellscha

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Semperit Aktiengesellschaft Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong primary indicators, Semperit Aktiengesellscha is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

VERBUND AG

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Semperit Aktiengesellscha and VERBUND AG

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

The idea behind Semperit Aktiengesellschaft Holding and VERBUND 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.