Correlation Between Volkswagen and Vienna Insurance
Can any of the company-specific risk be diversified away by investing in both Volkswagen and Vienna Insurance 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 Volkswagen and Vienna Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG Non Vtg and Vienna Insurance Group, you can compare the effects of market volatilities on Volkswagen and Vienna Insurance 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 Volkswagen with a short position of Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Vienna Insurance.
Diversification Opportunities for Volkswagen and Vienna Insurance
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Volkswagen and Vienna is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG Non Vtg and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and Volkswagen 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 Volkswagen AG Non Vtg are associated (or correlated) with Vienna Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vienna Insurance has no effect on the direction of Volkswagen i.e., Volkswagen and Vienna Insurance go up and down completely randomly.
Pair Corralation between Volkswagen and Vienna Insurance
Assuming the 90 days trading horizon Volkswagen AG Non Vtg is expected to generate 2.42 times more return on investment than Vienna Insurance. However, Volkswagen is 2.42 times more volatile than Vienna Insurance Group. It trades about 0.14 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.21 per unit of risk. If you would invest 8,610 in Volkswagen AG Non Vtg on October 12, 2024 and sell it today you would earn a total of 368.00 from holding Volkswagen AG Non Vtg or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volkswagen AG Non Vtg vs. Vienna Insurance Group
Performance |
| Timeline |
| Volkswagen AG Non |
| Vienna Insurance |
Volkswagen and Vienna Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Vienna Insurance
The main advantage of trading using opposite Volkswagen and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen position performs unexpectedly, Vienna Insurance 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 Vienna Insurance will offset losses from the drop in Vienna Insurance's long position.| Volkswagen vs. DFS Furniture PLC | Volkswagen vs. Atalaya Mining | Volkswagen vs. Panther Metals PLC | Volkswagen vs. Cornish Metals |
| Vienna Insurance vs. Walmart | Vienna Insurance vs. BYD Co | Vienna Insurance vs. Volkswagen AG | Vienna Insurance vs. Volkswagen AG Non Vtg |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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