Correlation Between Implenia and Stadler Rail

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

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

Diversification Opportunities for Implenia and Stadler Rail

-0.57

Correlation Coefficient

Implenia  Stadler Rail

Excellent diversification

The 3 months correlation between Implenia and Stadler is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Implenia AG and Stadler Rail AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stadler Rail AG and Implenia 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 Implenia AG are associated (or correlated) with Stadler Rail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stadler Rail AG has no effect on the direction of Implenia i.e., Implenia and Stadler Rail go up and down completely randomly.

Pair Corralation between Implenia and Stadler Rail

Assuming the 90 days trading horizon Implenia AG is expected to generate 1.3 times more return on investment than Stadler Rail. However, Implenia is 1.3 times more volatile than Stadler Rail AG. It trades about 0.14 of its potential returns per unit of risk. Stadler Rail AG is currently generating about -0.01 per unit of risk. If you would invest  4,485  in Implenia AG on April 24, 2025 and sell it today you would earn a total of  765.00  from holding Implenia AG or generate 17.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Implenia AG  vs.  Stadler Rail AG

Implenia AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Implenia AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Implenia showed solid returns over the last few months and may actually be approaching a breakup point.

Stadler Rail AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stadler Rail AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Stadler Rail is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Implenia and Stadler Rail

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

The idea behind Implenia AG and Stadler Rail 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..