Correlation Between CA Immobilien and EVN AG

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

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

Diversification Opportunities for CA Immobilien and EVN AG

0.59

Correlation Coefficient

CA Immobilien  EVN AG

Very weak diversification

The 3 months correlation between CAI and EVN is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding CA Immobilien Anlagen and EVN AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVN AG and CA Immobilien 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 CA Immobilien Anlagen are associated (or correlated) with EVN AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVN AG has no effect on the direction of CA Immobilien i.e., CA Immobilien and EVN AG go up and down completely randomly.

Pair Corralation between CA Immobilien and EVN AG

Assuming the 90 days trading horizon CA Immobilien Anlagen is expected to under-perform the EVN AG. In addition to that, CA Immobilien is 1.1 times more volatile than EVN AG. It trades about -0.04 of its total potential returns per unit of risk. EVN AG is currently generating about -0.01 per unit of volatility. If you would invest  2,200  in EVN AG on December 28, 2024 and sell it today you would lose (25.00) from holding EVN AG or give up 1.14% of portfolio value over 90 days.

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

CA Immobilien Anlagen  vs.  EVN AG

CA Immobilien Anlagen

Risk-Adjusted Performance

Very Weak

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

EVN AG

Risk-Adjusted Performance

Very Weak

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

Pair Trading with CA Immobilien and EVN AG

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

The idea behind CA Immobilien Anlagen and EVN 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.