Correlation Between Voestalpine and IMMOFINANZ

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

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

Diversification Opportunities for Voestalpine and IMMOFINANZ

0.54

Correlation Coefficient

Voestalpine  IMMOFINANZ

Very weak diversification

The 3 months correlation between Voestalpine and IMMOFINANZ is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Voestalpine AG and IMMOFINANZ AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMMOFINANZ AG and Voestalpine 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 Voestalpine 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 Voestalpine i.e., Voestalpine and IMMOFINANZ go up and down completely randomly.

Pair Corralation between Voestalpine and IMMOFINANZ

Assuming the 90 days trading horizon Voestalpine AG is expected to generate 0.61 times more return on investment than IMMOFINANZ. However, Voestalpine AG is 1.65 times less risky than IMMOFINANZ. It trades about -0.04 of its potential returns per unit of risk. IMMOFINANZ AG is currently generating about -0.23 per unit of risk. If you would invest  2,064  in Voestalpine AG on September 13, 2024 and sell it today you would lose (144.00) from holding Voestalpine AG or give up 6.98% of portfolio value over 90 days.

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

Voestalpine AG  vs.  IMMOFINANZ AG

Voestalpine AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voestalpine AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Voestalpine is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the 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 January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Voestalpine and IMMOFINANZ

The main advantage of trading using opposite Voestalpine and IMMOFINANZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voestalpine 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 Voestalpine 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.