Correlation Between Austriacard Holdings and Bioter SA

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

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

Diversification Opportunities for Austriacard Holdings and Bioter SA

0.08

Correlation Coefficient

Austriacard Holdings  Bioter SA

Significant diversification

The 3 months correlation between Austriacard and Bioter is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Austriacard Holdings AG and Bioter SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioter SA and Austriacard Holdings 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 Austriacard Holdings AG are associated (or correlated) with Bioter SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioter SA has no effect on the direction of Austriacard Holdings i.e., Austriacard Holdings and Bioter SA go up and down completely randomly.

Pair Corralation between Austriacard Holdings and Bioter SA

Assuming the 90 days trading horizon Austriacard Holdings AG is expected to generate 0.24 times more return on investment than Bioter SA. However, Austriacard Holdings AG is 4.14 times less risky than Bioter SA. It trades about 0.07 of its potential returns per unit of risk. Bioter SA is currently generating about -0.03 per unit of risk. If you would invest  580.00  in Austriacard Holdings AG on December 30, 2024 and sell it today you would earn a total of  23.00  from holding Austriacard Holdings AG or generate 3.97% return on investment over 90 days.

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

Austriacard Holdings AG  vs.  Bioter SA

Austriacard Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Austriacard Holdings AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Austriacard Holdings is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Bioter SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bioter SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Austriacard Holdings and Bioter SA

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

The idea behind Austriacard Holdings AG and Bioter SA 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.