Correlation Between Autoneum Holding and Zug Estates

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

Diversification Opportunities for Autoneum Holding and Zug Estates

-0.27

Correlation Coefficient

Autoneum Holding  Zug Estates

Very good diversification

The 3 months correlation between Autoneum and Zug is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Autoneum Holding AG and Zug Estates Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zug Estates Holding 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 Zug Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zug Estates Holding has no effect on the direction of Autoneum Holding i.e., Autoneum Holding and Zug Estates go up and down completely randomly.

Pair Corralation between Autoneum Holding and Zug Estates

Assuming the 90 days trading horizon Autoneum Holding is expected to generate 4.26 times less return on investment than Zug Estates. In addition to that, Autoneum Holding is 1.42 times more volatile than Zug Estates Holding. It trades about 0.03 of its total potential returns per unit of risk. Zug Estates Holding is currently generating about 0.15 per unit of volatility. If you would invest  184,500  in Zug Estates Holding on October 8, 2024 and sell it today you would earn a total of  19,500  from holding Zug Estates Holding or generate 10.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Autoneum Holding AG  vs.  Zug Estates Holding

Autoneum Holding

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Autoneum Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Zug Estates Holding

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Zug Estates Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Zug Estates may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Autoneum Holding and Zug Estates

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

The idea behind Autoneum Holding AG and Zug Estates Holding 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.