Correlation Between CA Immobilien and Telekom Austria

Can any of the company-specific risk be diversified away by investing in both CA Immobilien and Telekom Austria 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 Telekom Austria 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 Telekom Austria AG, you can compare the effects of market volatilities on CA Immobilien and Telekom Austria 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 Telekom Austria. Check out your portfolio center. Please also check ongoing floating volatility patterns of CA Immobilien and Telekom Austria.

Diversification Opportunities for CA Immobilien and Telekom Austria

-0.11

Correlation Coefficient

CA Immobilien  Telekom Austria

Good diversification

The 3 months correlation between CAI and Telekom is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding CA Immobilien Anlagen and Telekom Austria AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telekom Austria 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 Telekom Austria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telekom Austria AG has no effect on the direction of CA Immobilien i.e., CA Immobilien and Telekom Austria go up and down completely randomly.

Pair Corralation between CA Immobilien and Telekom Austria

Assuming the 90 days trading horizon CA Immobilien Anlagen is expected to under-perform the Telekom Austria. In addition to that, CA Immobilien is 1.48 times more volatile than Telekom Austria AG. It trades about -0.01 of its total potential returns per unit of risk. Telekom Austria AG is currently generating about 0.14 per unit of volatility. If you would invest  781.00  in Telekom Austria AG on December 2, 2024 and sell it today you would earn a total of  70.00  from holding Telekom Austria AG or generate 8.96% return on investment over 90 days.

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

CA Immobilien Anlagen  vs.  Telekom Austria 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.

Telekom Austria AG

Risk-Adjusted Performance

Good

Over the last 90 days Telekom Austria AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly weak basic indicators, Telekom Austria may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CA Immobilien and Telekom Austria

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

The idea behind CA Immobilien Anlagen and Telekom Austria 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.