Correlation Between SANOK RUBBER and AMAG Austria

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

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

Diversification Opportunities for SANOK RUBBER and AMAG Austria

0.38

Correlation Coefficient

SANOK RUBBER  AMAG Austria

Weak diversification

The 3 months correlation between SANOK and AMAG is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SANOK RUBBER ZY 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 SANOK RUBBER 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 SANOK RUBBER ZY 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 SANOK RUBBER i.e., SANOK RUBBER and AMAG Austria go up and down completely randomly.

Pair Corralation between SANOK RUBBER and AMAG Austria

Assuming the 90 days horizon SANOK RUBBER ZY is expected to generate 2.26 times more return on investment than AMAG Austria. However, SANOK RUBBER is 2.26 times more volatile than AMAG Austria Metall. It trades about 0.05 of its potential returns per unit of risk. AMAG Austria Metall is currently generating about -0.03 per unit of risk. If you would invest  386.00  in SANOK RUBBER ZY on October 24, 2024 and sell it today you would earn a total of  116.00  from holding SANOK RUBBER ZY or generate 30.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

SANOK RUBBER ZY  vs.  AMAG Austria Metall

SANOK RUBBER ZY

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SANOK RUBBER ZY are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, SANOK RUBBER may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AMAG Austria Metall

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AMAG Austria Metall are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, AMAG Austria is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SANOK RUBBER and AMAG Austria

The main advantage of trading using opposite SANOK RUBBER and AMAG Austria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANOK RUBBER 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 SANOK RUBBER ZY 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.