Correlation Between ALBIS LEASING and INSURANCE AUST

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

Diversification Opportunities for ALBIS LEASING and INSURANCE AUST

0.2

Correlation Coefficient

ALBIS LEASING  INSURANCE AUST

Modest diversification

The 3 months correlation between ALBIS and INSURANCE is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding ALBIS LEASING AG and INSURANCE AUST GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSURANCE AUST GRP 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 INSURANCE AUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSURANCE AUST GRP has no effect on the direction of ALBIS LEASING i.e., ALBIS LEASING and INSURANCE AUST go up and down completely randomly.

Pair Corralation between ALBIS LEASING and INSURANCE AUST

Assuming the 90 days trading horizon ALBIS LEASING AG is expected to generate 0.63 times more return on investment than INSURANCE AUST. However, ALBIS LEASING AG is 1.58 times less risky than INSURANCE AUST. It trades about -0.07 of its potential returns per unit of risk. INSURANCE AUST GRP is currently generating about -0.11 per unit of risk. If you would invest  278.00  in ALBIS LEASING AG on October 10, 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 Together
Strength	Very Weak
Accuracy	94.44%
Values	Daily Returns

ALBIS LEASING AG  vs.  INSURANCE AUST GRP

ALBIS LEASING AG

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ALBIS LEASING AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, ALBIS LEASING is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

INSURANCE AUST GRP

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INSURANCE AUST GRP are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, INSURANCE AUST may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ALBIS LEASING and INSURANCE AUST

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

The idea behind ALBIS LEASING AG and INSURANCE AUST GRP 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.