Correlation Between Telekom Austria and AT S

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

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

Diversification Opportunities for Telekom Austria and AT S

0.71

Correlation Coefficient

Telekom Austria  AT S

Poor diversification

The 3 months correlation between Telekom and ATS is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Telekom Austria AG and AT S Austria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AT S Austria and Telekom Austria 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 Telekom Austria AG are associated (or correlated) with AT S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AT S Austria has no effect on the direction of Telekom Austria i.e., Telekom Austria and AT S go up and down completely randomly.

Pair Corralation between Telekom Austria and AT S

Assuming the 90 days trading horizon Telekom Austria AG is expected to generate 0.42 times more return on investment than AT S. However, Telekom Austria AG is 2.4 times less risky than AT S. It trades about -0.09 of its potential returns per unit of risk. AT S Austria is currently generating about -0.13 per unit of risk. If you would invest  842.00  in Telekom Austria AG on September 12, 2024 and sell it today you would lose (60.00) from holding Telekom Austria AG or give up 7.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Telekom Austria AG  vs.  AT S Austria

Telekom Austria AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telekom Austria AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

AT S Austria

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AT S Austria 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 January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Telekom Austria and AT S

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

The idea behind Telekom Austria AG and AT S Austria 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.