Correlation Between Vienna Insurance and Target Healthcare
Can any of the company-specific risk be diversified away by investing in both Vienna Insurance and Target 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 Target 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 Target Healthcare REIT, you can compare the effects of market volatilities on Vienna Insurance and Target 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 Target Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vienna Insurance and Target Healthcare.
Diversification Opportunities for Vienna Insurance and Target Healthcare
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vienna and Target is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and Target Healthcare REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Healthcare REIT 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 Target Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Healthcare REIT has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and Target Healthcare go up and down completely randomly.
Pair Corralation between Vienna Insurance and Target Healthcare
Assuming the 90 days trading horizon Vienna Insurance is expected to generate 1.32 times less return on investment than Target Healthcare. But when comparing it to its historical volatility, Vienna Insurance Group is 1.13 times less risky than Target Healthcare. It trades about 0.19 of its potential returns per unit of risk. Target Healthcare REIT is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 8,313 in Target Healthcare REIT on September 14, 2024 and sell it today you would earn a total of 387.00 from holding Target Healthcare REIT or generate 4.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vienna Insurance Group vs. Target Healthcare REIT
Performance |
| Timeline |
| Vienna Insurance |
| Target Healthcare REIT |
Vienna Insurance and Target Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vienna Insurance and Target Healthcare
The main advantage of trading using opposite Vienna Insurance and Target Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vienna Insurance position performs unexpectedly, Target 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 Target Healthcare will offset losses from the drop in Target Healthcare's long position.| Vienna Insurance vs. European Metals Holdings | Vienna Insurance vs. Odfjell Drilling | Vienna Insurance vs. Aeorema Communications Plc | Vienna Insurance vs. Silvercorp Metals |
| Target Healthcare vs. Vienna Insurance Group | Target Healthcare vs. Norman Broadbent Plc | Target Healthcare vs. Addtech | Target Healthcare vs. PureTech Health plc |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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