Correlation Between AT S and LGL

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

By analyzing existing cross correlation between AT S Austria and LGL Group, you can compare the effects of market volatilities on AT S and LGL 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 AT S with a short position of LGL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AT S and LGL.

Diversification Opportunities for AT S and LGL

-0.85

Correlation Coefficient

AT S  LGL

Pay attention - limited upside

The 3 months correlation between ASAAF and LGL is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding AT S Austria and LGL Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LGL Group and AT S 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 AT S Austria are associated (or correlated) with LGL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LGL Group has no effect on the direction of AT S i.e., AT S and LGL go up and down completely randomly.

Pair Corralation between AT S and LGL

Assuming the 90 days horizon AT S Austria is expected to generate 0.62 times more return on investment than LGL. However, AT S Austria is 1.61 times less risky than LGL. It trades about 0.22 of its potential returns per unit of risk. LGL Group is currently generating about -0.05 per unit of risk. If you would invest  1,253  in AT S Austria on December 5, 2024 and sell it today you would earn a total of  125.00  from holding AT S Austria or generate 9.98% return on investment over 90 days.

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

AT S Austria  vs.  LGL Group

AT S Austria

Risk-Adjusted Performance

Very Weak

Over the last 90 days AT S Austria has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

LGL Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LGL Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain technical and fundamental indicators, LGL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with AT S and LGL

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

The idea behind AT S Austria and LGL Group 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.