Correlation Between Alfa Financial and Vienna Insurance
Can any of the company-specific risk be diversified away by investing in both Alfa Financial 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 Alfa Financial and Vienna Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and Vienna Insurance Group, you can compare the effects of market volatilities on Alfa Financial 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 Alfa Financial with a short position of Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Vienna Insurance.
Diversification Opportunities for Alfa Financial and Vienna Insurance
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alfa and Vienna is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and Alfa Financial 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 Alfa Financial Software 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 Alfa Financial i.e., Alfa Financial and Vienna Insurance go up and down completely randomly.
Pair Corralation between Alfa Financial and Vienna Insurance
Assuming the 90 days trading horizon Alfa Financial Software is expected to generate 2.44 times more return on investment than Vienna Insurance. However, Alfa Financial is 2.44 times more volatile than Vienna Insurance Group. It trades about 0.04 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.07 per unit of risk. If you would invest 15,548 in Alfa Financial Software on November 2, 2024 and sell it today you would earn a total of 6,152 from holding Alfa Financial Software or generate 39.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. Vienna Insurance Group
Performance |
| Timeline |
| Alfa Financial Software |
| Vienna Insurance |
Alfa Financial and Vienna Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and Vienna Insurance
The main advantage of trading using opposite Alfa Financial and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial 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.| Alfa Financial vs. Check Point Software | Alfa Financial vs. Europa Metals | Alfa Financial vs. National Beverage Corp | Alfa Financial vs. CNH Industrial NV |
| Vienna Insurance vs. Catena Media PLC | Vienna Insurance vs. Hollywood Bowl Group | Vienna Insurance vs. One Media iP | Vienna Insurance vs. National Beverage 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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