Correlation Between Warteck Invest and Metall Zug

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

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

Diversification Opportunities for Warteck Invest and Metall Zug

-0.33

Correlation Coefficient

Warteck Invest  Metall Zug

Very good diversification

The 3 months correlation between Warteck and Metall is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Warteck Invest and Metall Zug AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metall Zug 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 Metall Zug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metall Zug AG has no effect on the direction of Warteck Invest i.e., Warteck Invest and Metall Zug go up and down completely randomly.

Pair Corralation between Warteck Invest and Metall Zug

Assuming the 90 days trading horizon Warteck Invest is expected to generate 0.4 times more return on investment than Metall Zug. However, Warteck Invest is 2.52 times less risky than Metall Zug. It trades about 0.23 of its potential returns per unit of risk. Metall Zug AG is currently generating about -0.07 per unit of risk. If you would invest  178,500  in Warteck Invest on December 2, 2024 and sell it today you would earn a total of  16,000  from holding Warteck Invest or generate 8.96% return on investment over 90 days.

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

Warteck Invest  vs.  Metall Zug AG

Warteck Invest

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Warteck Invest are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Warteck Invest may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Metall Zug AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Metall Zug AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Warteck Invest and Metall Zug

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

The idea behind Warteck Invest and Metall Zug 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.