Correlation Between Aareal Bank and Omnia Wellness
Can any of the company-specific risk be diversified away by investing in both Aareal Bank and Omnia Wellness 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 Aareal Bank and Omnia Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aareal Bank AG and Omnia Wellness, you can compare the effects of market volatilities on Aareal Bank and Omnia Wellness 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 Aareal Bank with a short position of Omnia Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aareal Bank and Omnia Wellness.
Diversification Opportunities for Aareal Bank and Omnia Wellness
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Aareal and Omnia is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Aareal Bank AG and Omnia Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnia Wellness and Aareal Bank 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 Aareal Bank AG are associated (or correlated) with Omnia Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnia Wellness has no effect on the direction of Aareal Bank i.e., Aareal Bank and Omnia Wellness go up and down completely randomly.
Pair Corralation between Aareal Bank and Omnia Wellness
If you would invest 0.02 in Omnia Wellness on January 25, 2024 and sell it today you would earn a total of 0.00 from holding Omnia Wellness or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.41% |
Values | Daily Returns |
Aareal Bank AG vs. Omnia Wellness
Performance |
Timeline |
Aareal Bank AG |
Omnia Wellness |
Aareal Bank and Omnia Wellness Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aareal Bank and Omnia Wellness
The main advantage of trading using opposite Aareal Bank and Omnia Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aareal Bank position performs unexpectedly, Omnia Wellness 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 Omnia Wellness will offset losses from the drop in Omnia Wellness' long position.Aareal Bank vs. First Horizon | Aareal Bank vs. First Horizon | Aareal Bank vs. KB Financial Group | Aareal Bank vs. Banco Santander Brasil |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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