Correlation Between VAT Group and Daetwyl I

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

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

Diversification Opportunities for VAT Group and Daetwyl I

0.94

Correlation Coefficient

VAT Group  Daetwyl I

Almost no diversification

The 3 months correlation between VAT and Daetwyl is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding VAT Group AG and Daetwyl I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daetwyl I and VAT Group 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 VAT Group AG are associated (or correlated) with Daetwyl I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daetwyl I has no effect on the direction of VAT Group i.e., VAT Group and Daetwyl I go up and down completely randomly.

Pair Corralation between VAT Group and Daetwyl I

Assuming the 90 days trading horizon VAT Group AG is expected to under-perform the Daetwyl I. In addition to that, VAT Group is 1.61 times more volatile than Daetwyl I. It trades about -0.12 of its total potential returns per unit of risk. Daetwyl I is currently generating about -0.13 per unit of volatility. If you would invest  17,300  in Daetwyl I on September 30, 2024 and sell it today you would lose (3,840) from holding Daetwyl I or give up 22.2% of portfolio value over 90 days.

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

VAT Group AG  vs.  Daetwyl I

VAT Group AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VAT Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Daetwyl I

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Daetwyl I has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with VAT Group and Daetwyl I

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

The idea behind VAT Group AG and Daetwyl I 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..