Correlation Between Hubersuhner and Metall Zug

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

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

Diversification Opportunities for Hubersuhner and Metall Zug

0.84

Correlation Coefficient

Hubersuhner  Metall Zug

Very poor diversification

The 3 months correlation between Hubersuhner and Metall is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hubersuhner AG and Metall Zug AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metall Zug 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 Metall Zug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metall Zug AG has no effect on the direction of Hubersuhner i.e., Hubersuhner and Metall Zug go up and down completely randomly.

Pair Corralation between Hubersuhner and Metall Zug

Assuming the 90 days trading horizon Hubersuhner AG is expected to under-perform the Metall Zug. But the stock apears to be less risky and, when comparing its historical volatility, Hubersuhner AG is 1.89 times less risky than Metall Zug. The stock trades about -0.05 of its potential returns per unit of risk. The Metall Zug AG is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  108,500  in Metall Zug AG on September 27, 2024 and sell it today you would earn a total of  4,500  from holding Metall Zug AG or generate 4.15% return on investment over 90 days.

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

Hubersuhner AG  vs.  Metall Zug 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.

Metall Zug AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metall Zug AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Metall Zug is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Hubersuhner and Metall Zug

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

The idea behind Hubersuhner AG and Metall Zug 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..