Correlation Between Birkenstock Holding and Andritz AG

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

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

Diversification Opportunities for Birkenstock Holding and Andritz AG

-0.76

Correlation Coefficient

Birkenstock Holding  Andritz AG

Pay attention - limited upside

The 3 months correlation between Birkenstock and Andritz is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Birkenstock Holding plc and Andritz AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andritz AG and Birkenstock 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 Birkenstock Holding plc are associated (or correlated) with Andritz AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andritz AG has no effect on the direction of Birkenstock Holding i.e., Birkenstock Holding and Andritz AG go up and down completely randomly.

Pair Corralation between Birkenstock Holding and Andritz AG

Given the investment horizon of 90 days Birkenstock Holding plc is expected to generate 0.89 times more return on investment than Andritz AG. However, Birkenstock Holding plc is 1.13 times less risky than Andritz AG. It trades about 0.0 of its potential returns per unit of risk. Andritz AG is currently generating about -0.07 per unit of risk. If you would invest  6,222  in Birkenstock Holding plc on September 21, 2024 and sell it today you would lose (182.00) from holding Birkenstock Holding plc or give up 2.93% of portfolio value over 90 days.

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

Birkenstock Holding plc  vs.  Andritz AG

Birkenstock Holding plc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Birkenstock Holding plc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Birkenstock Holding disclosed solid returns over the last few months and may actually be approaching a breakup point.

Andritz AG

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Birkenstock Holding and Andritz AG

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

The idea behind Birkenstock Holding plc and Andritz 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.