Correlation Between ALBIS LEASING and HMS Bergbau

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

Diversification Opportunities for ALBIS LEASING and HMS Bergbau

-0.35

Correlation Coefficient

ALBIS LEASING  HMS Bergbau

Very good diversification

The 3 months correlation between ALBIS and HMS is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ALBIS LEASING AG and HMS Bergbau AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMS Bergbau AG 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 HMS Bergbau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMS Bergbau AG has no effect on the direction of ALBIS LEASING i.e., ALBIS LEASING and HMS Bergbau go up and down completely randomly.

Pair Corralation between ALBIS LEASING and HMS Bergbau

Assuming the 90 days trading horizon ALBIS LEASING AG is expected to under-perform the HMS Bergbau. But the stock apears to be less risky and, when comparing its historical volatility, ALBIS LEASING AG is 2.44 times less risky than HMS Bergbau. The stock trades about -0.07 of its potential returns per unit of risk. The HMS Bergbau AG is currently generating about 0.54 of returns per unit of risk over similar time horizon. If you would invest  2,940  in HMS Bergbau AG on October 24, 2024 and sell it today you would earn a total of  820.00  from holding HMS Bergbau AG or generate 27.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

ALBIS LEASING AG  vs.  HMS Bergbau AG

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.

HMS Bergbau AG

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HMS Bergbau AG are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, HMS Bergbau unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ALBIS LEASING and HMS Bergbau

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

The idea behind ALBIS LEASING AG and HMS Bergbau 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.