Correlation Between Interroll Holding and Also Holding

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

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

Diversification Opportunities for Interroll Holding and Also Holding

0.73

Correlation Coefficient

Interroll Holding  Also Holding

Poor diversification

The 3 months correlation between Interroll and Also is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Interroll Holding 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 Interroll Holding 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 Interroll Holding 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 Interroll Holding i.e., Interroll Holding and Also Holding go up and down completely randomly.

Pair Corralation between Interroll Holding and Also Holding

Assuming the 90 days trading horizon Interroll Holding AG is expected to under-perform the Also Holding. But the stock apears to be less risky and, when comparing its historical volatility, Interroll Holding AG is 1.04 times less risky than Also Holding. The stock trades about -0.05 of its potential returns per unit of risk. The Also Holding AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  22,449  in Also Holding AG on December 4, 2024 and sell it today you would earn a total of  5,351  from holding Also Holding AG or generate 23.84% return on investment over 90 days.

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

Interroll Holding AG  vs.  Also Holding AG

Interroll Holding

Risk-Adjusted Performance

Weak

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

Also Holding AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Also Holding AG are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Also Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Interroll Holding and Also Holding

The main advantage of trading using opposite Interroll Holding and Also Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interroll Holding 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 Interroll Holding 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .