Correlation Between Hubersuhner and Also Holding

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

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

Diversification Opportunities for Hubersuhner and Also Holding

0.88

Correlation Coefficient

Hubersuhner  Also Holding

Very poor diversification

The 3 months correlation between Hubersuhner and Also is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hubersuhner AG 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 Hubersuhner 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 Hubersuhner AG 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 Hubersuhner i.e., Hubersuhner and Also Holding go up and down completely randomly.

Pair Corralation between Hubersuhner and Also Holding

Assuming the 90 days trading horizon Hubersuhner AG is expected to under-perform the Also Holding. But the stock apears to be less risky and, when comparing its historical volatility, Hubersuhner AG is 1.31 times less risky than Also Holding. The stock trades about -0.3 of its potential returns per unit of risk. The Also Holding AG is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest  26,250  in Also Holding AG on September 13, 2024 and sell it today you would lose (3,200) from holding Also Holding AG or give up 12.19% of portfolio value over 90 days.

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

Hubersuhner AG  vs.  Also Holding AG

Hubersuhner AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hubersuhner 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 January 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 latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Hubersuhner and Also Holding

The main advantage of trading using opposite Hubersuhner and Also Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubersuhner 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 Hubersuhner AG 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.