Correlation Between Warteck Invest and Gurit Holding

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

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

Diversification Opportunities for Warteck Invest and Gurit Holding

0.53

Correlation Coefficient

Warteck Invest  Gurit Holding

Very weak diversification

The 3 months correlation between Warteck and Gurit is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Warteck Invest and Gurit Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gurit Holding AG and Warteck Invest 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 Warteck Invest are associated (or correlated) with Gurit Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gurit Holding AG has no effect on the direction of Warteck Invest i.e., Warteck Invest and Gurit Holding go up and down completely randomly.

Pair Corralation between Warteck Invest and Gurit Holding

Assuming the 90 days trading horizon Warteck Invest is expected to generate 5.15 times less return on investment than Gurit Holding. But when comparing it to its historical volatility, Warteck Invest is 7.32 times less risky than Gurit Holding. It trades about 0.03 of its potential returns per unit of risk. Gurit Holding AG is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,520  in Gurit Holding AG on December 30, 2024 and sell it today you would earn a total of  16.00  from holding Gurit Holding AG or generate 1.05% return on investment over 90 days.

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

Warteck Invest  vs.  Gurit Holding AG

Warteck Invest

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Warteck Invest are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Warteck Invest is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Gurit Holding AG

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gurit Holding AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Gurit Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Warteck Invest and Gurit Holding

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

The idea behind Warteck Invest and Gurit 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.