Correlation Between ALBIS LEASING and Vicinity Centres

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

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

Diversification Opportunities for ALBIS LEASING and Vicinity Centres

0.13

Correlation Coefficient

ALBIS LEASING  Vicinity Centres

Average diversification

The 3 months correlation between ALBIS and Vicinity is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding ALBIS LEASING AG and Vicinity Centres in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicinity Centres and ALBIS LEASING 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 ALBIS LEASING AG are associated (or correlated) with Vicinity Centres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicinity Centres has no effect on the direction of ALBIS LEASING i.e., ALBIS LEASING and Vicinity Centres go up and down completely randomly.

Pair Corralation between ALBIS LEASING and Vicinity Centres

Assuming the 90 days trading horizon ALBIS LEASING is expected to generate 2.95 times less return on investment than Vicinity Centres. In addition to that, ALBIS LEASING is 1.27 times more volatile than Vicinity Centres. It trades about 0.04 of its total potential returns per unit of risk. Vicinity Centres is currently generating about 0.16 per unit of volatility. If you would invest  120.00  in Vicinity Centres on October 27, 2024 and sell it today you would earn a total of  3.00  from holding Vicinity Centres or generate 2.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

ALBIS LEASING AG  vs.  Vicinity Centres

ALBIS LEASING AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALBIS LEASING AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, ALBIS LEASING is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Vicinity Centres

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vicinity Centres has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Vicinity Centres is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ALBIS LEASING and Vicinity Centres

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

The idea behind ALBIS LEASING AG and Vicinity Centres 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.