Correlation Between SCHALTBAU HOLDING and KION Group

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

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

Diversification Opportunities for SCHALTBAU HOLDING and KION Group

-0.43

Correlation Coefficient

SCHALTBAU HOLDING  KION Group

Very good diversification

The 3 months correlation between SCHALTBAU and KION is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding SCHALTBAU HOLDING and KION Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KION Group AG and SCHALTBAU 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 SCHALTBAU HOLDING are associated (or correlated) with KION Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KION Group AG has no effect on the direction of SCHALTBAU HOLDING i.e., SCHALTBAU HOLDING and KION Group go up and down completely randomly.

Pair Corralation between SCHALTBAU HOLDING and KION Group

Assuming the 90 days trading horizon SCHALTBAU HOLDING is expected to generate 0.51 times more return on investment than KION Group. However, SCHALTBAU HOLDING is 1.98 times less risky than KION Group. It trades about 0.13 of its potential returns per unit of risk. KION Group AG is currently generating about -0.09 per unit of risk. If you would invest  5,800  in SCHALTBAU HOLDING on September 29, 2024 and sell it today you would earn a total of  150.00  from holding SCHALTBAU HOLDING or generate 2.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

SCHALTBAU HOLDING  vs.  KION Group AG

SCHALTBAU HOLDING

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SCHALTBAU HOLDING are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, SCHALTBAU HOLDING is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

KION Group AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KION Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SCHALTBAU HOLDING and KION Group

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

The idea behind SCHALTBAU HOLDING and KION Group 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.