Correlation Between American International and Vienna Insurance
Can any of the company-specific risk be diversified away by investing in both American International 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 American International and Vienna Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American International Group and Vienna Insurance Group, you can compare the effects of market volatilities on American International 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 American International with a short position of Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of American International and Vienna Insurance.
Diversification Opportunities for American International and Vienna Insurance
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Vienna is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding American International Group and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and American International 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 American International Group 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 American International i.e., American International and Vienna Insurance go up and down completely randomly.
Pair Corralation between American International and Vienna Insurance
Assuming the 90 days trading horizon American International is expected to generate 1.84 times less return on investment than Vienna Insurance. In addition to that, American International is 1.81 times more volatile than Vienna Insurance Group. It trades about 0.07 of its total potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.25 per unit of volatility. If you would invest 3,000 in Vienna Insurance Group on October 26, 2024 and sell it today you would earn a total of 120.00 from holding Vienna Insurance Group or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American International Group vs. Vienna Insurance Group
Performance |
| Timeline |
| American International |
| Vienna Insurance |
American International and Vienna Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American International and Vienna Insurance
The main advantage of trading using opposite American International and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American International 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.| American International vs. GMO Internet | American International vs. COMPUTERSHARE | American International vs. Computershare Limited | American International vs. Charter Communications |
| Vienna Insurance vs. Zurich Insurance Group | Vienna Insurance vs. American International Group | Vienna Insurance vs. Assicurazioni Generali SpA | Vienna Insurance vs. Sun Life Financial |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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