Correlation Between Bank Fr and Oberbank

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

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

Diversification Opportunities for Bank Fr and Oberbank

0.0

Correlation Coefficient

Bank Fr  Oberbank

Pay attention - limited upside

The 3 months correlation between Bank and Oberbank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank Fr Tirol and Oberbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberbank AG and Bank Fr 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 Bank Fr Tirol are associated (or correlated) with Oberbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberbank AG has no effect on the direction of Bank Fr i.e., Bank Fr and Oberbank go up and down completely randomly.

Pair Corralation between Bank Fr and Oberbank

If you would invest  6,980  in Oberbank AG on December 28, 2024 and sell it today you would earn a total of  40.00  from holding Oberbank AG or generate 0.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bank Fr Tirol  vs.  Oberbank AG

Bank Fr Tirol

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Fr Tirol has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bank Fr is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Oberbank AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oberbank AG are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Oberbank is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Bank Fr and Oberbank

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

The idea behind Bank Fr Tirol and Oberbank 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.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.