Correlation Between INSURANCE AUST and ALBIS LEASING

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

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

Diversification Opportunities for INSURANCE AUST and ALBIS LEASING

-0.22

Correlation Coefficient

INSURANCE AUST  ALBIS LEASING

Very good diversification

The 3 months correlation between INSURANCE and ALBIS is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and ALBIS LEASING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALBIS LEASING AG and INSURANCE AUST 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 INSURANCE AUST GRP are associated (or correlated) with ALBIS LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALBIS LEASING AG has no effect on the direction of INSURANCE AUST i.e., INSURANCE AUST and ALBIS LEASING go up and down completely randomly.

Pair Corralation between INSURANCE AUST and ALBIS LEASING

Assuming the 90 days trading horizon INSURANCE AUST GRP is expected to under-perform the ALBIS LEASING. In addition to that, INSURANCE AUST is 3.77 times more volatile than ALBIS LEASING AG. It trades about -0.07 of its total potential returns per unit of risk. ALBIS LEASING AG is currently generating about -0.04 per unit of volatility. If you would invest  278.00  in ALBIS LEASING AG on December 22, 2024 and sell it today you would lose (4.00) from holding ALBIS LEASING AG or give up 1.44% of portfolio value over 90 days.

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

INSURANCE AUST GRP  vs.  ALBIS LEASING AG

INSURANCE AUST GRP

Risk-Adjusted Performance

Very Weak

Over the last 90 days INSURANCE AUST GRP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

ALBIS LEASING AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALBIS LEASING AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, ALBIS LEASING is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with INSURANCE AUST and ALBIS LEASING

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

The idea behind INSURANCE AUST GRP and ALBIS LEASING 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.