Correlation Between AMAG Austria and BKS Bank
Can any of the company-specific risk be diversified away by investing in both AMAG Austria and BKS Bank 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 AMAG Austria and BKS Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMAG Austria Metall and BKS Bank AG, you can compare the effects of market volatilities on AMAG Austria and BKS Bank 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 AMAG Austria with a short position of BKS Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMAG Austria and BKS Bank.
Diversification Opportunities for AMAG Austria and BKS Bank
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AMAG and BKS is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding AMAG Austria Metall and BKS Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKS Bank AG and AMAG 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 AMAG Austria Metall are associated (or correlated) with BKS Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKS Bank AG has no effect on the direction of AMAG Austria i.e., AMAG Austria and BKS Bank go up and down completely randomly.
Pair Corralation between AMAG Austria and BKS Bank
Assuming the 90 days trading horizon AMAG Austria Metall is expected to generate 2.53 times more return on investment than BKS Bank. However, AMAG Austria is 2.53 times more volatile than BKS Bank AG. It trades about 0.1 of its potential returns per unit of risk. BKS Bank AG is currently generating about 0.0 per unit of risk. If you would invest 2,569 in AMAG Austria Metall on February 11, 2024 and sell it today you would earn a total of 51.00 from holding AMAG Austria Metall or generate 1.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
AMAG Austria Metall vs. BKS Bank AG
Performance |
Timeline |
AMAG Austria Metall |
BKS Bank AG |
AMAG Austria and BKS Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AMAG Austria and BKS Bank
The main advantage of trading using opposite AMAG Austria and BKS Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMAG Austria position performs unexpectedly, BKS Bank 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 BKS Bank will offset losses from the drop in BKS Bank's long position.AMAG Austria vs. Lenzing Aktiengesellschaft | AMAG Austria vs. Voestalpine AG | AMAG Austria vs. EVN AG | AMAG Austria vs. Palfinger AG |
BKS Bank vs. AMAG Austria Metall | BKS Bank vs. SBM Offshore NV | BKS Bank vs. UNIQA Insurance Group | BKS Bank vs. Vienna Insurance Group |
Check out your portfolio center.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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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