Correlation Between Schoeller Bleckmann and Polytec Holding

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

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

Diversification Opportunities for Schoeller Bleckmann and Polytec Holding

-0.27

Correlation Coefficient

Schoeller Bleckmann  Polytec Holding

Very good diversification

The 3 months correlation between Schoeller and Polytec is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Schoeller Bleckmann Oilfield E and Polytec Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polytec Holding AG and Schoeller Bleckmann 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 Schoeller Bleckmann Oilfield Equipment are associated (or correlated) with Polytec Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polytec Holding AG has no effect on the direction of Schoeller Bleckmann i.e., Schoeller Bleckmann and Polytec Holding go up and down completely randomly.

Pair Corralation between Schoeller Bleckmann and Polytec Holding

Assuming the 90 days trading horizon Schoeller Bleckmann Oilfield Equipment is expected to generate 1.12 times more return on investment than Polytec Holding. However, Schoeller Bleckmann is 1.12 times more volatile than Polytec Holding AG. It trades about -0.06 of its potential returns per unit of risk. Polytec Holding AG is currently generating about -0.09 per unit of risk. If you would invest  6,262  in Schoeller Bleckmann Oilfield Equipment on October 9, 2024 and sell it today you would lose (3,072) from holding Schoeller Bleckmann Oilfield Equipment or give up 49.06% of portfolio value over 90 days.

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

Schoeller Bleckmann Oilfield E  vs.  Polytec Holding AG

Schoeller Bleckmann

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Schoeller Bleckmann Oilfield Equipment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Schoeller Bleckmann may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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.

Pair Trading with Schoeller Bleckmann and Polytec Holding

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

The idea behind Schoeller Bleckmann Oilfield Equipment and Polytec Holding 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.