Correlation Between Aumann AG and Nordex SE

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

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

Diversification Opportunities for Aumann AG and Nordex SE

0.4

Correlation Coefficient

Aumann AG  Nordex SE

Very weak diversification

The 3 months correlation between Aumann and Nordex is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Aumann AG and Nordex SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordex SE and Aumann AG 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 Aumann AG are associated (or correlated) with Nordex SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordex SE has no effect on the direction of Aumann AG i.e., Aumann AG and Nordex SE go up and down completely randomly.

Pair Corralation between Aumann AG and Nordex SE

Assuming the 90 days horizon Aumann AG is expected to under-perform the Nordex SE. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aumann AG is 1.16 times less risky than Nordex SE. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Nordex SE is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,423  in Nordex SE on December 1, 2024 and sell it today you would lose (78.00) from holding Nordex SE or give up 5.48% of portfolio value over 90 days.

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

Aumann AG  vs.  Nordex SE

Aumann AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aumann AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary 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.

Nordex SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nordex SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Nordex SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Aumann AG and Nordex SE

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

The idea behind Aumann AG and Nordex SE 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.