Correlation Between LandisGyr Group and Metall Zug

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

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

Diversification Opportunities for LandisGyr Group and Metall Zug

0.82

Correlation Coefficient

LandisGyr Group  Metall Zug

Very poor diversification

The 3 months correlation between LandisGyr and Metall is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding LandisGyr Group 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 LandisGyr Group 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 LandisGyr Group 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 LandisGyr Group i.e., LandisGyr Group and Metall Zug go up and down completely randomly.

Pair Corralation between LandisGyr Group and Metall Zug

Assuming the 90 days trading horizon LandisGyr Group AG is expected to under-perform the Metall Zug. In addition to that, LandisGyr Group is 1.12 times more volatile than Metall Zug AG. It trades about -0.27 of its total potential returns per unit of risk. Metall Zug AG is currently generating about -0.07 per unit of volatility. If you would invest  121,500  in Metall Zug AG on September 17, 2024 and sell it today you would lose (8,500) from holding Metall Zug AG or give up 7.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.48%
Values	Daily Returns

LandisGyr Group AG  vs.  Metall Zug AG

LandisGyr Group AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LandisGyr Group 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 LandisGyr Group and Metall Zug

The main advantage of trading using opposite LandisGyr Group and Metall Zug positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LandisGyr Group 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 LandisGyr Group 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 Commodity Directory module to find actively traded commodities issued by global exchanges.