Correlation Between Intershop Holding and HIAG Immobilien

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

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

Diversification Opportunities for Intershop Holding and HIAG Immobilien

0.0

Correlation Coefficient

Intershop Holding  HIAG Immobilien

Pay attention - limited upside

The 3 months correlation between Intershop and HIAG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Intershop Holding AG and HIAG Immobilien Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIAG Immobilien Holding and Intershop 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 Intershop Holding AG are associated (or correlated) with HIAG Immobilien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIAG Immobilien Holding has no effect on the direction of Intershop Holding i.e., Intershop Holding and HIAG Immobilien go up and down completely randomly.

Pair Corralation between Intershop Holding and HIAG Immobilien

If you would invest  8,460  in HIAG Immobilien Holding on December 22, 2024 and sell it today you would earn a total of  1,080  from holding HIAG Immobilien Holding or generate 12.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Intershop Holding AG  vs.  HIAG Immobilien Holding

Intershop Holding

Risk-Adjusted Performance

OK

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

HIAG Immobilien Holding

Risk-Adjusted Performance

Good

Over the last 90 days HIAG Immobilien Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, HIAG Immobilien showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intershop Holding and HIAG Immobilien

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

The idea behind Intershop Holding AG and HIAG Immobilien Holding 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.