Correlation Between Polytec Holding and IMMOFINANZ

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

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

Diversification Opportunities for Polytec Holding and IMMOFINANZ

0.87

Correlation Coefficient

Polytec Holding  IMMOFINANZ

Very poor diversification

The 3 months correlation between Polytec and IMMOFINANZ is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Polytec Holding AG and IMMOFINANZ AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMMOFINANZ AG and Polytec 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 Polytec Holding AG are associated (or correlated) with IMMOFINANZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMMOFINANZ AG has no effect on the direction of Polytec Holding i.e., Polytec Holding and IMMOFINANZ go up and down completely randomly.

Pair Corralation between Polytec Holding and IMMOFINANZ

Assuming the 90 days trading horizon Polytec Holding AG is expected to under-perform the IMMOFINANZ. But the stock apears to be less risky and, when comparing its historical volatility, Polytec Holding AG is 1.18 times less risky than IMMOFINANZ. The stock trades about -0.11 of its potential returns per unit of risk. The IMMOFINANZ AG is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  2,110  in IMMOFINANZ AG on October 7, 2024 and sell it today you would lose (626.00) from holding IMMOFINANZ AG or give up 29.67% of portfolio value over 90 days.

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

Polytec Holding AG  vs.  IMMOFINANZ AG

Polytec Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polytec Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

IMMOFINANZ AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IMMOFINANZ AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Polytec Holding and IMMOFINANZ

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

The idea behind Polytec Holding AG and IMMOFINANZ 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.