Correlation Between ALBIS LEASING and FORTEC Elektronik

Can any of the company-specific risk be diversified away by investing in both ALBIS LEASING and FORTEC Elektronik 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 FORTEC Elektronik 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 FORTEC Elektronik AG, you can compare the effects of market volatilities on ALBIS LEASING and FORTEC Elektronik 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 FORTEC Elektronik. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALBIS LEASING and FORTEC Elektronik.

Diversification Opportunities for ALBIS LEASING and FORTEC Elektronik

-0.5

Correlation Coefficient

ALBIS LEASING  FORTEC Elektronik

Very good diversification

The 3 months correlation between ALBIS and FORTEC is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding ALBIS LEASING AG and FORTEC Elektronik AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORTEC Elektronik 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 FORTEC Elektronik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORTEC Elektronik has no effect on the direction of ALBIS LEASING i.e., ALBIS LEASING and FORTEC Elektronik go up and down completely randomly.

Pair Corralation between ALBIS LEASING and FORTEC Elektronik

Assuming the 90 days trading horizon ALBIS LEASING AG is expected to generate 0.13 times more return on investment than FORTEC Elektronik. However, ALBIS LEASING AG is 7.49 times less risky than FORTEC Elektronik. It trades about -0.04 of its potential returns per unit of risk. FORTEC Elektronik AG is currently generating about -0.03 per unit of risk. If you would invest  278.00  in ALBIS LEASING AG on December 22, 2024 and sell it today you would lose (4.00) from holding ALBIS LEASING AG or give up 1.44% of portfolio value over 90 days.

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

ALBIS LEASING AG  vs.  FORTEC Elektronik AG

ALBIS LEASING AG

Risk-Adjusted Performance

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

FORTEC Elektronik

Risk-Adjusted Performance

Very Weak

Over the last 90 days FORTEC Elektronik AG 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 ALBIS LEASING and FORTEC Elektronik

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

The idea behind ALBIS LEASING AG and FORTEC Elektronik 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.