Correlation Between AGRANA Beteiligungs and Rosenbauer International

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

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

Diversification Opportunities for AGRANA Beteiligungs and Rosenbauer International

-0.02

Correlation Coefficient

AGRANA Beteiligungs  Rosenbauer International

Good diversification

The 3 months correlation between AGRANA and Rosenbauer is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding AGRANA Beteiligungs Aktiengese and Rosenbauer International AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rosenbauer International and AGRANA Beteiligungs 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 AGRANA Beteiligungs Aktiengesellschaft are associated (or correlated) with Rosenbauer International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rosenbauer International has no effect on the direction of AGRANA Beteiligungs i.e., AGRANA Beteiligungs and Rosenbauer International go up and down completely randomly.

Pair Corralation between AGRANA Beteiligungs and Rosenbauer International

Assuming the 90 days trading horizon AGRANA Beteiligungs is expected to generate 2.36 times less return on investment than Rosenbauer International. But when comparing it to its historical volatility, AGRANA Beteiligungs Aktiengesellschaft is 1.86 times less risky than Rosenbauer International. It trades about 0.07 of its potential returns per unit of risk. Rosenbauer International AG is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,430  in Rosenbauer International AG on December 30, 2024 and sell it today you would earn a total of  420.00  from holding Rosenbauer International AG or generate 12.24% return on investment over 90 days.

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

AGRANA Beteiligungs Aktiengese  vs.  Rosenbauer International AG

AGRANA Beteiligungs

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AGRANA Beteiligungs Aktiengesellschaft are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, AGRANA Beteiligungs is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Rosenbauer International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rosenbauer International AG are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Rosenbauer International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AGRANA Beteiligungs and Rosenbauer International

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

The idea behind AGRANA Beteiligungs Aktiengesellschaft and Rosenbauer International 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 Stocks Directory module to find actively traded stocks across global markets.