Correlation Between DO Aktiengesellscha and Voestalpine

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

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

Diversification Opportunities for DO Aktiengesellscha and Voestalpine

0.71

Correlation Coefficient

DO Aktiengesellscha  Voestalpine

Poor diversification

The 3 months correlation between DOC and Voestalpine is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding DO Aktiengesellschaft and Voestalpine AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voestalpine AG and DO Aktiengesellscha 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 DO Aktiengesellschaft are associated (or correlated) with Voestalpine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voestalpine AG has no effect on the direction of DO Aktiengesellscha i.e., DO Aktiengesellscha and Voestalpine go up and down completely randomly.

Pair Corralation between DO Aktiengesellscha and Voestalpine

Assuming the 90 days trading horizon DO Aktiengesellschaft is expected to generate 1.24 times more return on investment than Voestalpine. However, DO Aktiengesellscha is 1.24 times more volatile than Voestalpine AG. It trades about 0.31 of its potential returns per unit of risk. Voestalpine AG is currently generating about 0.13 per unit of risk. If you would invest  13,448  in DO Aktiengesellschaft on April 25, 2025 and sell it today you would earn a total of  6,352  from holding DO Aktiengesellschaft or generate 47.23% return on investment over 90 days.

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

DO Aktiengesellschaft  vs.  Voestalpine AG

DO Aktiengesellschaft

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DO Aktiengesellschaft are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental indicators, DO Aktiengesellscha demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Voestalpine AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voestalpine AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical and fundamental indicators, Voestalpine demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DO Aktiengesellscha and Voestalpine

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

The idea behind DO Aktiengesellschaft and Voestalpine 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.