Correlation Between Aurubis AG and TRADEDOUBLER

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

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

Diversification Opportunities for Aurubis AG and TRADEDOUBLER

0.88

Correlation Coefficient

Aurubis AG  TRADEDOUBLER

Very poor diversification

The 3 months correlation between Aurubis and TRADEDOUBLER is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Aurubis AG and TRADEDOUBLER AB SK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEDOUBLER AB SK and Aurubis AG 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 Aurubis AG are associated (or correlated) with TRADEDOUBLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEDOUBLER AB SK has no effect on the direction of Aurubis AG i.e., Aurubis AG and TRADEDOUBLER go up and down completely randomly.

Pair Corralation between Aurubis AG and TRADEDOUBLER

Assuming the 90 days horizon Aurubis AG is expected to generate 3.54 times less return on investment than TRADEDOUBLER. But when comparing it to its historical volatility, Aurubis AG is 2.56 times less risky than TRADEDOUBLER. It trades about 0.14 of its potential returns per unit of risk. TRADEDOUBLER AB SK is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  28.00  in TRADEDOUBLER AB SK on December 24, 2024 and sell it today you would earn a total of  20.00  from holding TRADEDOUBLER AB SK or generate 71.43% return on investment over 90 days.

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

Aurubis AG  vs.  TRADEDOUBLER AB SK

Aurubis AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aurubis AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Aurubis AG reported solid returns over the last few months and may actually be approaching a breakup point.

TRADEDOUBLER AB SK

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TRADEDOUBLER AB SK are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, TRADEDOUBLER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aurubis AG and TRADEDOUBLER

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

The idea behind Aurubis AG and TRADEDOUBLER AB SK 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.

Check out your portfolio center.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.