Correlation Between Austrian Traded and Budapest
Can any of the company-specific risk be diversified away by investing in both Austrian Traded and Budapest 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 Austrian Traded and Budapest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austrian Traded Index and Budapest SE, you can compare the effects of market volatilities on Austrian Traded and Budapest 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 Austrian Traded with a short position of Budapest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austrian Traded and Budapest.
Diversification Opportunities for Austrian Traded and Budapest
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Austrian and Budapest is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Austrian Traded Index and Budapest SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Budapest SE and Austrian Traded 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 Austrian Traded Index are associated (or correlated) with Budapest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Budapest SE has no effect on the direction of Austrian Traded i.e., Austrian Traded and Budapest go up and down completely randomly.
Pair Corralation between Austrian Traded and Budapest
Assuming the 90 days trading horizon Austrian Traded is expected to generate 3.82 times less return on investment than Budapest. But when comparing it to its historical volatility, Austrian Traded Index is 1.79 times less risky than Budapest. It trades about 0.05 of its potential returns per unit of risk. Budapest SE is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,662,506 in Budapest SE on February 4, 2024 and sell it today you would earn a total of 137,718 from holding Budapest SE or generate 2.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Austrian Traded Index vs. Budapest SE
Performance |
Timeline |
Austrian Traded and Budapest Volatility Contrast
Predicted Return Density |
Returns |
Austrian Traded Index
Pair trading matchups for Austrian Traded
Budapest SE
Pair trading matchups for Budapest
Pair Trading with Austrian Traded and Budapest
The main advantage of trading using opposite Austrian Traded and Budapest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austrian Traded position performs unexpectedly, Budapest 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 Budapest will offset losses from the drop in Budapest's long position.Austrian Traded vs. AMAG Austria Metall | Austrian Traded vs. CNH Industrial NV | Austrian Traded vs. Wiener Privatbank SE | Austrian Traded vs. Universal Music Group |
Budapest vs. Infineon Technologies AG | Budapest vs. Delta Technologies Nyrt | Budapest vs. OTP Bank Nyrt | Budapest vs. Nutex Investments PLC |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |