Correlation Between Vienna Insurance and Induction Healthcare
Can any of the company-specific risk be diversified away by investing in both Vienna Insurance and Induction Healthcare 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 Induction Healthcare 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 Induction Healthcare Group, you can compare the effects of market volatilities on Vienna Insurance and Induction Healthcare 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 Induction Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vienna Insurance and Induction Healthcare.
Diversification Opportunities for Vienna Insurance and Induction Healthcare
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vienna and Induction is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and Induction Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Induction Healthcare 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 Induction Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Induction Healthcare has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and Induction Healthcare go up and down completely randomly.
Pair Corralation between Vienna Insurance and Induction Healthcare
Assuming the 90 days trading horizon Vienna Insurance Group is expected to generate 0.31 times more return on investment than Induction Healthcare. However, Vienna Insurance Group is 3.25 times less risky than Induction Healthcare. It trades about 0.21 of its potential returns per unit of risk. Induction Healthcare Group is currently generating about -0.12 per unit of risk. If you would invest 2,948 in Vienna Insurance Group on October 12, 2024 and sell it today you would earn a total of 82.00 from holding Vienna Insurance Group or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vienna Insurance Group vs. Induction Healthcare Group
Performance |
| Timeline |
| Vienna Insurance |
| Induction Healthcare |
Vienna Insurance and Induction Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vienna Insurance and Induction Healthcare
The main advantage of trading using opposite Vienna Insurance and Induction Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vienna Insurance position performs unexpectedly, Induction Healthcare 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 Induction Healthcare will offset losses from the drop in Induction Healthcare's long position.| Vienna Insurance vs. Walmart | Vienna Insurance vs. BYD Co | Vienna Insurance vs. Volkswagen AG | Vienna Insurance vs. Volkswagen AG Non Vtg |
| Induction Healthcare vs. Vienna Insurance Group | Induction Healthcare vs. Electronic Arts | Induction Healthcare vs. Arrow Electronics | Induction Healthcare vs. Samsung Electronics Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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