Correlation Between Walter Meier and Aluflexpack

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

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

Diversification Opportunities for Walter Meier and Aluflexpack

0.0

Correlation Coefficient

Walter Meier  Aluflexpack

Pay attention - limited upside

The 3 months correlation between Walter and Aluflexpack is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Walter Meier AG and Aluflexpack AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluflexpack AG and Walter Meier 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 Walter Meier AG are associated (or correlated) with Aluflexpack. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluflexpack AG has no effect on the direction of Walter Meier i.e., Walter Meier and Aluflexpack go up and down completely randomly.

Pair Corralation between Walter Meier and Aluflexpack

If you would invest  1,435  in Aluflexpack AG on October 8, 2024 and sell it today you would earn a total of  15.00  from holding Aluflexpack AG or generate 1.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Walter Meier AG  vs.  Aluflexpack AG

Walter Meier AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Walter Meier AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Walter Meier is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Aluflexpack AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aluflexpack AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Aluflexpack 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 Walter Meier and Aluflexpack

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

The idea behind Walter Meier AG and Aluflexpack 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.

Check out your portfolio center.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.