Correlation Between IMMOFINANZ and Zumtobel Group

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

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

Diversification Opportunities for IMMOFINANZ and Zumtobel Group

0.62

Correlation Coefficient

IMMOFINANZ  Zumtobel Group

Poor diversification

The 3 months correlation between IMMOFINANZ and Zumtobel is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding IMMOFINANZ AG and Zumtobel Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zumtobel Group AG and IMMOFINANZ 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 IMMOFINANZ AG are associated (or correlated) with Zumtobel Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zumtobel Group AG has no effect on the direction of IMMOFINANZ i.e., IMMOFINANZ and Zumtobel Group go up and down completely randomly.

Pair Corralation between IMMOFINANZ and Zumtobel Group

Assuming the 90 days trading horizon IMMOFINANZ AG is expected to under-perform the Zumtobel Group. In addition to that, IMMOFINANZ is 1.41 times more volatile than Zumtobel Group AG. It trades about -0.03 of its total potential returns per unit of risk. Zumtobel Group AG is currently generating about -0.04 per unit of volatility. If you would invest  597.00  in Zumtobel Group AG on October 22, 2024 and sell it today you would lose (98.00) from holding Zumtobel Group AG or give up 16.42% of portfolio value over 90 days.

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

IMMOFINANZ AG  vs.  Zumtobel Group AG

IMMOFINANZ AG

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IMMOFINANZ AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, IMMOFINANZ is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Zumtobel Group AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zumtobel Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with IMMOFINANZ and Zumtobel Group

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

The idea behind IMMOFINANZ AG and Zumtobel Group 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.