Correlation Between Wienerberger and BAWAG Group

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

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

Diversification Opportunities for Wienerberger and BAWAG Group

-0.68

Correlation Coefficient

Wienerberger  BAWAG Group

Excellent diversification

The 3 months correlation between Wienerberger and BAWAG is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Wienerberger AG and BAWAG Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAWAG Group AG and Wienerberger 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 Wienerberger AG are associated (or correlated) with BAWAG Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAWAG Group AG has no effect on the direction of Wienerberger i.e., Wienerberger and BAWAG Group go up and down completely randomly.

Pair Corralation between Wienerberger and BAWAG Group

Assuming the 90 days trading horizon Wienerberger AG is expected to under-perform the BAWAG Group. In addition to that, Wienerberger is 1.13 times more volatile than BAWAG Group AG. It trades about -0.12 of its total potential returns per unit of risk. BAWAG Group AG is currently generating about 0.18 per unit of volatility. If you would invest  6,955  in BAWAG Group AG on September 29, 2024 and sell it today you would earn a total of  1,080  from holding BAWAG Group AG or generate 15.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Wienerberger AG  vs.  BAWAG Group AG

Wienerberger AG

Risk-Adjusted Performance

0 of 100

Very Weak

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

BAWAG Group AG

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BAWAG Group AG are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, BAWAG Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wienerberger and BAWAG Group

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

The idea behind Wienerberger AG and BAWAG 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 Commodity Directory module to find actively traded commodities issued by global exchanges.