Correlation Between VERBUND AG and Andritz AG

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

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

Diversification Opportunities for VERBUND AG and Andritz AG

-0.15

Correlation Coefficient

VERBUND AG  Andritz AG

Good diversification

The 3 months correlation between VERBUND and Andritz is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding VERBUND AG and Andritz AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andritz AG and VERBUND AG 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 VERBUND AG are associated (or correlated) with Andritz AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andritz AG has no effect on the direction of VERBUND AG i.e., VERBUND AG and Andritz AG go up and down completely randomly.

Pair Corralation between VERBUND AG and Andritz AG

Assuming the 90 days trading horizon VERBUND AG is expected to generate 0.74 times more return on investment than Andritz AG. However, VERBUND AG is 1.34 times less risky than Andritz AG. It trades about 0.04 of its potential returns per unit of risk. Andritz AG is currently generating about 0.0 per unit of risk. If you would invest  6,440  in VERBUND AG on May 6, 2025 and sell it today you would earn a total of  150.00  from holding VERBUND AG or generate 2.33% return on investment over 90 days.

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

VERBUND AG  vs.  Andritz AG

VERBUND AG

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VERBUND AG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, VERBUND AG is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Andritz AG

Risk-Adjusted Performance

Very Weak

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

Pair Trading with VERBUND AG and Andritz AG

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

The idea behind VERBUND AG and Andritz 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.