Correlation Between OMV Aktiengesellscha and Palfinger

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

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

Diversification Opportunities for OMV Aktiengesellscha and Palfinger

-0.22

Correlation Coefficient

OMV Aktiengesellscha  Palfinger

Very good diversification

The 3 months correlation between OMV and Palfinger is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding OMV Aktiengesellschaft and Palfinger AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palfinger AG and OMV Aktiengesellscha 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 OMV Aktiengesellschaft are associated (or correlated) with Palfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palfinger AG has no effect on the direction of OMV Aktiengesellscha i.e., OMV Aktiengesellscha and Palfinger go up and down completely randomly.

Pair Corralation between OMV Aktiengesellscha and Palfinger

Assuming the 90 days trading horizon OMV Aktiengesellschaft is expected to under-perform the Palfinger. In addition to that, OMV Aktiengesellscha is 1.23 times more volatile than Palfinger AG. It trades about -0.17 of its total potential returns per unit of risk. Palfinger AG is currently generating about -0.2 per unit of volatility. If you would invest  2,360  in Palfinger AG on March 31, 2024 and sell it today you would lose (140.00) from holding Palfinger AG or give up 5.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

OMV Aktiengesellschaft  vs.  Palfinger AG

OMV Aktiengesellschaft

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OMV Aktiengesellschaft 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.

Palfinger AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Palfinger AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong essential indicators, Palfinger is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with OMV Aktiengesellscha and Palfinger

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

The idea behind OMV Aktiengesellschaft and Palfinger 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.