Correlation Between Autoneum Holding and IShares Asia

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

By analyzing existing cross correlation between Autoneum Holding AG and iShares Asia Pacific, you can compare the effects of market volatilities on Autoneum Holding and IShares Asia 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 Autoneum Holding with a short position of IShares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autoneum Holding and IShares Asia.

Diversification Opportunities for Autoneum Holding and IShares Asia

0.15

Correlation Coefficient

Autoneum Holding  IShares Asia

Average diversification

The 3 months correlation between Autoneum and IShares is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Autoneum Holding AG and iShares Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Asia Pacific and Autoneum Holding 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 Autoneum Holding AG are associated (or correlated) with IShares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Asia Pacific has no effect on the direction of Autoneum Holding i.e., Autoneum Holding and IShares Asia go up and down completely randomly.

Pair Corralation between Autoneum Holding and IShares Asia

Assuming the 90 days trading horizon Autoneum Holding AG is expected to generate 1.1 times more return on investment than IShares Asia. However, Autoneum Holding is 1.1 times more volatile than iShares Asia Pacific. It trades about 0.56 of its potential returns per unit of risk. iShares Asia Pacific is currently generating about -0.23 per unit of risk. If you would invest  10,820  in Autoneum Holding AG on October 7, 2024 and sell it today you would earn a total of  1,080  from holding Autoneum Holding AG or generate 9.98% return on investment over 90 days.

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

Autoneum Holding AG  vs.  iShares Asia Pacific

Autoneum Holding

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Autoneum Holding AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Autoneum Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

iShares Asia Pacific

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Asia Pacific has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Etf's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Pair Trading with Autoneum Holding and IShares Asia

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

The idea behind Autoneum Holding AG and iShares Asia Pacific 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.