Correlation Between Vienna Insurance and Fortune Brands
Can any of the company-specific risk be diversified away by investing in both Vienna Insurance and Fortune Brands 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 Vienna Insurance and Fortune Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vienna Insurance Group and Fortune Brands Home, you can compare the effects of market volatilities on Vienna Insurance and Fortune Brands 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 Vienna Insurance with a short position of Fortune Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vienna Insurance and Fortune Brands.
Diversification Opportunities for Vienna Insurance and Fortune Brands
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vienna and Fortune is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and Fortune Brands Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Brands Home and Vienna Insurance 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 Vienna Insurance Group are associated (or correlated) with Fortune Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Brands Home has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and Fortune Brands go up and down completely randomly.
Pair Corralation between Vienna Insurance and Fortune Brands
Assuming the 90 days trading horizon Vienna Insurance Group is expected to generate 0.26 times more return on investment than Fortune Brands. However, Vienna Insurance Group is 3.77 times less risky than Fortune Brands. It trades about 0.08 of its potential returns per unit of risk. Fortune Brands Home is currently generating about -0.14 per unit of risk. If you would invest 2,975 in Vienna Insurance Group on October 16, 2024 and sell it today you would earn a total of 25.00 from holding Vienna Insurance Group or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 73.68% |
| Values | Daily Returns |
Vienna Insurance Group vs. Fortune Brands Home
Performance |
| Timeline |
| Vienna Insurance |
| Fortune Brands Home |
Vienna Insurance and Fortune Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vienna Insurance and Fortune Brands
The main advantage of trading using opposite Vienna Insurance and Fortune Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vienna Insurance position performs unexpectedly, Fortune Brands 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 Fortune Brands will offset losses from the drop in Fortune Brands' long position.| Vienna Insurance vs. Canadian General Investments | Vienna Insurance vs. Verizon Communications | Vienna Insurance vs. Tavistock Investments Plc | Vienna Insurance vs. FC Investment Trust |
| Fortune Brands vs. Fresenius Medical Care | Fortune Brands vs. CAP LEASE AVIATION | Fortune Brands vs. Vienna Insurance Group | Fortune Brands vs. MTI Wireless Edge |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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