Correlation Between Oesterr Post and VERBUND AG

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

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

Diversification Opportunities for Oesterr Post and VERBUND AG

-0.01

Correlation Coefficient

Oesterr Post  VERBUND AG

Good diversification

The 3 months correlation between Oesterr and VERBUND is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Oesterr Post AG and VERBUND AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VERBUND AG and Oesterr Post 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 Oesterr Post AG are associated (or correlated) with VERBUND AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VERBUND AG has no effect on the direction of Oesterr Post i.e., Oesterr Post and VERBUND AG go up and down completely randomly.

Pair Corralation between Oesterr Post and VERBUND AG

Assuming the 90 days trading horizon Oesterr Post AG is expected to generate 0.65 times more return on investment than VERBUND AG. However, Oesterr Post AG is 1.53 times less risky than VERBUND AG. It trades about 0.17 of its potential returns per unit of risk. VERBUND AG is currently generating about -0.06 per unit of risk. If you would invest  2,860  in Oesterr Post AG on December 25, 2024 and sell it today you would earn a total of  295.00  from holding Oesterr Post AG or generate 10.31% return on investment over 90 days.

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

Oesterr Post AG  vs.  VERBUND AG

Oesterr Post AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oesterr Post AG are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Oesterr Post may actually be approaching a critical reversion point that can send shares even higher in April 2025.

VERBUND AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days VERBUND AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, VERBUND AG is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Oesterr Post and VERBUND AG

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

The idea behind Oesterr Post AG and VERBUND 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 Stocks Directory module to find actively traded stocks across global markets.