Correlation Between Vienna Insurance and Toyota
Can any of the company-specific risk be diversified away by investing in both Vienna Insurance and Toyota 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 Toyota 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 Toyota Motor Corp, you can compare the effects of market volatilities on Vienna Insurance and Toyota 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 Toyota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vienna Insurance and Toyota.
Diversification Opportunities for Vienna Insurance and Toyota
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vienna and Toyota is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and Toyota Motor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toyota Motor Corp 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 Toyota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toyota Motor Corp has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and Toyota go up and down completely randomly.
Pair Corralation between Vienna Insurance and Toyota
Assuming the 90 days trading horizon Vienna Insurance Group is expected to generate 0.54 times more return on investment than Toyota. However, Vienna Insurance Group is 1.84 times less risky than Toyota. It trades about 0.22 of its potential returns per unit of risk. Toyota Motor Corp is currently generating about -0.01 per unit of risk. If you would invest 2,875 in Vienna Insurance Group on September 17, 2024 and sell it today you would earn a total of 98.00 from holding Vienna Insurance Group or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vienna Insurance Group vs. Toyota Motor Corp
Performance |
| Timeline |
| Vienna Insurance |
| Toyota Motor Corp |
Vienna Insurance and Toyota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vienna Insurance and Toyota
The main advantage of trading using opposite Vienna Insurance and Toyota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vienna Insurance position performs unexpectedly, Toyota 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 Toyota will offset losses from the drop in Toyota's long position.| Vienna Insurance vs. Centaur Media | Vienna Insurance vs. Axway Software SA | Vienna Insurance vs. G5 Entertainment AB | Vienna Insurance vs. XLMedia PLC |
| Toyota vs. Liontrust Asset Management | Toyota vs. Vienna Insurance Group | Toyota vs. Spirent Communications plc | Toyota vs. Ecclesiastical Insurance Office |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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