Correlation Between Carlo Gavazzi and Also Holding

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

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

Diversification Opportunities for Carlo Gavazzi and Also Holding

0.88

Correlation Coefficient

Carlo Gavazzi  Also Holding

Very poor diversification

The 3 months correlation between Carlo and Also is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Carlo Gavazzi Holding and Also Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Also Holding AG and Carlo Gavazzi 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 Carlo Gavazzi Holding are associated (or correlated) with Also Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Also Holding AG has no effect on the direction of Carlo Gavazzi i.e., Carlo Gavazzi and Also Holding go up and down completely randomly.

Pair Corralation between Carlo Gavazzi and Also Holding

Assuming the 90 days trading horizon Carlo Gavazzi Holding is expected to under-perform the Also Holding. In addition to that, Carlo Gavazzi is 2.18 times more volatile than Also Holding AG. It trades about -0.13 of its total potential returns per unit of risk. Also Holding AG is currently generating about -0.22 per unit of volatility. If you would invest  26,300  in Also Holding AG on October 3, 2024 and sell it today you would lose (3,900) from holding Also Holding AG or give up 14.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	96.72%
Values	Daily Returns

Carlo Gavazzi Holding  vs.  Also Holding AG

Carlo Gavazzi Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlo Gavazzi Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Also Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Also Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Carlo Gavazzi and Also Holding

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

The idea behind Carlo Gavazzi Holding and Also Holding 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.