Correlation Between Voestalpine and Schoeller Bleckmann

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

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

Diversification Opportunities for Voestalpine and Schoeller Bleckmann

0.08

Correlation Coefficient

Voestalpine  Schoeller Bleckmann

Significant diversification

The 3 months correlation between Voestalpine and Schoeller is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Voestalpine AG and Schoeller Bleckmann Oilfield E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schoeller Bleckmann 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 Schoeller Bleckmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schoeller Bleckmann has no effect on the direction of Voestalpine i.e., Voestalpine and Schoeller Bleckmann go up and down completely randomly.

Pair Corralation between Voestalpine and Schoeller Bleckmann

Assuming the 90 days trading horizon Voestalpine AG is expected to under-perform the Schoeller Bleckmann. In addition to that, Voestalpine is 1.01 times more volatile than Schoeller Bleckmann Oilfield Equipment. It trades about -0.09 of its total potential returns per unit of risk. Schoeller Bleckmann Oilfield Equipment is currently generating about -0.03 per unit of volatility. If you would invest  3,140  in Schoeller Bleckmann Oilfield Equipment on September 5, 2024 and sell it today you would lose (175.00) from holding Schoeller Bleckmann Oilfield Equipment or give up 5.57% of portfolio value over 90 days.

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

Voestalpine AG  vs.  Schoeller Bleckmann Oilfield E

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 latest inconsistent performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Schoeller Bleckmann

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schoeller Bleckmann Oilfield Equipment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Schoeller Bleckmann is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Voestalpine and Schoeller Bleckmann

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

The idea behind Voestalpine AG and Schoeller Bleckmann Oilfield Equipment 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.