Correlation Between Wiener Privatbank and AMAG Austria

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

By analyzing existing cross correlation between Wiener Privatbank SE and AMAG Austria Metall, you can compare the effects of market volatilities on Wiener Privatbank and AMAG Austria 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 Wiener Privatbank with a short position of AMAG Austria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wiener Privatbank and AMAG Austria.

Diversification Opportunities for Wiener Privatbank and AMAG Austria

-0.65

Correlation Coefficient

Wiener Privatbank  AMAG Austria

Excellent diversification

The 3 months correlation between Wiener and AMAG is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Wiener Privatbank SE and AMAG Austria Metall in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG Austria Metall and Wiener Privatbank 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 Wiener Privatbank SE are associated (or correlated) with AMAG Austria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG Austria Metall has no effect on the direction of Wiener Privatbank i.e., Wiener Privatbank and AMAG Austria go up and down completely randomly.

Pair Corralation between Wiener Privatbank and AMAG Austria

Assuming the 90 days trading horizon Wiener Privatbank SE is expected to generate 1.57 times more return on investment than AMAG Austria. However, Wiener Privatbank is 1.57 times more volatile than AMAG Austria Metall. It trades about 0.16 of its potential returns per unit of risk. AMAG Austria Metall is currently generating about -0.1 per unit of risk. If you would invest  555.00  in Wiener Privatbank SE on February 11, 2024 and sell it today you would earn a total of  75.00  from holding Wiener Privatbank SE or generate 13.51% return on investment over 90 days.

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

Wiener Privatbank SE  vs.  AMAG Austria Metall

Wiener Privatbank

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wiener Privatbank SE are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental drivers, Wiener Privatbank demonstrated solid returns over the last few months and may actually be approaching a breakup point.

AMAG Austria Metall

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMAG Austria Metall 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.

Pair Trading with Wiener Privatbank and AMAG Austria

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

The idea behind Wiener Privatbank SE and AMAG Austria Metall 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.