Correlation Between Vienna Insurance and Litigation Capital
Can any of the company-specific risk be diversified away by investing in both Vienna Insurance and Litigation Capital 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 Litigation Capital 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 Litigation Capital Management, you can compare the effects of market volatilities on Vienna Insurance and Litigation Capital 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 Litigation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vienna Insurance and Litigation Capital.
Diversification Opportunities for Vienna Insurance and Litigation Capital
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vienna and Litigation is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and Litigation Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litigation Capital 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 Litigation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litigation Capital has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and Litigation Capital go up and down completely randomly.
Pair Corralation between Vienna Insurance and Litigation Capital
Assuming the 90 days trading horizon Vienna Insurance Group is expected to under-perform the Litigation Capital. But the stock apears to be less risky and, when comparing its historical volatility, Vienna Insurance Group is 2.33 times less risky than Litigation Capital. The stock trades about -0.04 of its potential returns per unit of risk. The Litigation Capital Management is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 9,856 in Litigation Capital Management on August 30, 2024 and sell it today you would earn a total of 1,719 from holding Litigation Capital Management or generate 17.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Vienna Insurance Group vs. Litigation Capital Management
Performance |
| Timeline |
| Vienna Insurance |
| Litigation Capital |
Vienna Insurance and Litigation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vienna Insurance and Litigation Capital
The main advantage of trading using opposite Vienna Insurance and Litigation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vienna Insurance position performs unexpectedly, Litigation Capital 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 Litigation Capital will offset losses from the drop in Litigation Capital's long position.| Vienna Insurance vs. Litigation Capital Management | Vienna Insurance vs. Tatton Asset Management | Vienna Insurance vs. Check Point Software | Vienna Insurance vs. Home Depot |
| Litigation Capital vs. Samsung Electronics Co | Litigation Capital vs. Samsung Electronics Co | Litigation Capital vs. Hyundai Motor | Litigation Capital vs. Toyota Motor Corp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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