Correlation Between Alpha Trust and Austriacard Holdings

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

By analyzing existing cross correlation between Alpha Trust Mutual and Austriacard Holdings AG, you can compare the effects of market volatilities on Alpha Trust and Austriacard Holdings 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 Alpha Trust with a short position of Austriacard Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Trust and Austriacard Holdings.

Diversification Opportunities for Alpha Trust and Austriacard Holdings

0.21

Correlation Coefficient

Alpha Trust  Austriacard Holdings

Modest diversification

The 3 months correlation between Alpha and Austriacard is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Trust Mutual and Austriacard Holdings AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austriacard Holdings and Alpha Trust 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 Alpha Trust Mutual are associated (or correlated) with Austriacard Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austriacard Holdings has no effect on the direction of Alpha Trust i.e., Alpha Trust and Austriacard Holdings go up and down completely randomly.

Pair Corralation between Alpha Trust and Austriacard Holdings

Assuming the 90 days trading horizon Alpha Trust is expected to generate 11.25 times less return on investment than Austriacard Holdings. But when comparing it to its historical volatility, Alpha Trust Mutual is 3.44 times less risky than Austriacard Holdings. It trades about 0.06 of its potential returns per unit of risk. Austriacard Holdings AG is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  535.00  in Austriacard Holdings AG on December 4, 2024 and sell it today you would earn a total of  72.00  from holding Austriacard Holdings AG or generate 13.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Alpha Trust Mutual  vs.  Austriacard Holdings AG

Alpha Trust Mutual

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Trust Mutual are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Alpha Trust is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Austriacard Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Austriacard Holdings AG are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Austriacard Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alpha Trust and Austriacard Holdings

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

The idea behind Alpha Trust Mutual and Austriacard Holdings 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.