Correlation Between Wienerberger and CA Immobilien

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

By analyzing existing cross correlation between Wienerberger AG and CA Immobilien Anlagen, you can compare the effects of market volatilities on Wienerberger and CA Immobilien 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 CA Immobilien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wienerberger and CA Immobilien.

Diversification Opportunities for Wienerberger and CA Immobilien

0.5

Correlation Coefficient

Wienerberger  CA Immobilien

Very weak diversification

The 3 months correlation between Wienerberger and CAI is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Wienerberger AG and CA Immobilien Anlagen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CA Immobilien Anlagen 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 CA Immobilien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CA Immobilien Anlagen has no effect on the direction of Wienerberger i.e., Wienerberger and CA Immobilien go up and down completely randomly.

Pair Corralation between Wienerberger and CA Immobilien

Assuming the 90 days trading horizon Wienerberger AG is expected to generate 0.56 times more return on investment than CA Immobilien. However, Wienerberger AG is 1.79 times less risky than CA Immobilien. It trades about -0.04 of its potential returns per unit of risk. CA Immobilien Anlagen is currently generating about -0.06 per unit of risk. If you would invest  2,830  in Wienerberger AG on September 5, 2024 and sell it today you would lose (146.00) from holding Wienerberger AG or give up 5.16% of portfolio value over 90 days.

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

Wienerberger AG  vs.  CA Immobilien Anlagen

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 fairly strong technical and fundamental indicators, Wienerberger is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

CA Immobilien Anlagen

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Wienerberger and CA Immobilien

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

The idea behind Wienerberger AG and CA Immobilien Anlagen 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.