Correlation Between BKS Bank and Semperit Aktiengesellscha

Can any of the company-specific risk be diversified away by investing in both BKS Bank and Semperit Aktiengesellscha 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 BKS Bank and Semperit Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for BKS Bank and Semperit Aktiengesellscha

0.3

Correlation Coefficient

BKS Bank  Semperit Aktiengesellscha

Weak diversification

The 3 months correlation between BKS and Semperit is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding BKS Bank AG and Semperit Aktiengesellschaft Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semperit Aktiengesellscha and BKS Bank 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 BKS Bank AG are associated (or correlated) with Semperit Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semperit Aktiengesellscha has no effect on the direction of BKS Bank i.e., BKS Bank and Semperit Aktiengesellscha go up and down completely randomly.

Pair Corralation between BKS Bank and Semperit Aktiengesellscha

Assuming the 90 days trading horizon BKS Bank AG is expected to under-perform the Semperit Aktiengesellscha. But the stock apears to be less risky and, when comparing its historical volatility, BKS Bank AG is 1.71 times less risky than Semperit Aktiengesellscha. The stock trades about -0.05 of its potential returns per unit of risk. The Semperit Aktiengesellschaft Holding is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,200  in Semperit Aktiengesellschaft Holding on September 12, 2024 and sell it today you would lose (20.00) from holding Semperit Aktiengesellschaft Holding or give up 1.67% of portfolio value over 90 days.

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

BKS Bank AG  vs.  Semperit Aktiengesellschaft Ho

BKS Bank AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BKS Bank AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, BKS Bank is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Semperit Aktiengesellscha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Semperit Aktiengesellschaft Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, Semperit Aktiengesellscha is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with BKS Bank and Semperit Aktiengesellscha

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

The idea behind BKS Bank AG and Semperit Aktiengesellschaft 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.