Correlation Between Public Service and Vienna Insurance
Can any of the company-specific risk be diversified away by investing in both Public Service and Vienna Insurance 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 Public Service and Vienna Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Service Enterprise and Vienna Insurance Group, you can compare the effects of market volatilities on Public Service and Vienna Insurance 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 Public Service with a short position of Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Service and Vienna Insurance.
Diversification Opportunities for Public Service and Vienna Insurance
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Public and Vienna is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Public Service Enterprise and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and Public Service 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 Public Service Enterprise are associated (or correlated) with Vienna Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vienna Insurance has no effect on the direction of Public Service i.e., Public Service and Vienna Insurance go up and down completely randomly.
Pair Corralation between Public Service and Vienna Insurance
Assuming the 90 days trading horizon Public Service Enterprise is expected to generate 1.22 times more return on investment than Vienna Insurance. However, Public Service is 1.22 times more volatile than Vienna Insurance Group. It trades about 0.07 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.07 per unit of risk. If you would invest 5,701 in Public Service Enterprise on October 13, 2024 and sell it today you would earn a total of 2,721 from holding Public Service Enterprise or generate 47.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.79% |
| Values | Daily Returns |
Public Service Enterprise vs. Vienna Insurance Group
Performance |
| Timeline |
| Public Service Enterprise |
| Vienna Insurance |
Public Service and Vienna Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Service and Vienna Insurance
The main advantage of trading using opposite Public Service and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Service position performs unexpectedly, Vienna Insurance 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 Vienna Insurance will offset losses from the drop in Vienna Insurance's long position.| Public Service vs. Vienna Insurance Group | Public Service vs. InterContinental Hotels Group | Public Service vs. Primorus Investments plc | Public Service vs. Sabre Insurance Group |
| Vienna Insurance vs. Lindsell Train Investment | Vienna Insurance vs. Caledonia Investments | Vienna Insurance vs. Jupiter Green Investment | Vienna Insurance vs. Diversified Energy |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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