Correlation Between Implenia and Zug Estates

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

By analyzing existing cross correlation between Implenia AG and Zug Estates Holding, you can compare the effects of market volatilities on Implenia and Zug Estates 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 Zug Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Implenia and Zug Estates.

Diversification Opportunities for Implenia and Zug Estates

0.64

Correlation Coefficient

Implenia  Zug Estates

Poor diversification

The 3 months correlation between Implenia and Zug is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Implenia AG and Zug Estates Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zug Estates Holding 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 Zug Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zug Estates Holding has no effect on the direction of Implenia i.e., Implenia and Zug Estates go up and down completely randomly.

Pair Corralation between Implenia and Zug Estates

Assuming the 90 days trading horizon Implenia AG is expected to generate 1.77 times more return on investment than Zug Estates. However, Implenia is 1.77 times more volatile than Zug Estates Holding. It trades about 0.16 of its potential returns per unit of risk. Zug Estates Holding is currently generating about 0.01 per unit of risk. If you would invest  4,420  in Implenia AG on April 22, 2025 and sell it today you would earn a total of  900.00  from holding Implenia AG or generate 20.36% return on investment over 90 days.

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

Implenia AG  vs.  Zug Estates Holding

Implenia AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Implenia AG are ranked lower than 12 (%) 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.

Zug Estates Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zug Estates Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Zug Estates 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 Implenia and Zug Estates

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

The idea behind Implenia AG and Zug Estates Holding 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.