Correlation Between Fidelity Sustainable and Vienna Insurance
Can any of the company-specific risk be diversified away by investing in both Fidelity Sustainable 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 Fidelity Sustainable and Vienna Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Sustainable USD and Vienna Insurance Group, you can compare the effects of market volatilities on Fidelity Sustainable 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 Fidelity Sustainable with a short position of Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Sustainable and Vienna Insurance.
Diversification Opportunities for Fidelity Sustainable and Vienna Insurance
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and Vienna is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Sustainable USD and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and Fidelity Sustainable 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 Fidelity Sustainable USD 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 Fidelity Sustainable i.e., Fidelity Sustainable and Vienna Insurance go up and down completely randomly.
Pair Corralation between Fidelity Sustainable and Vienna Insurance
Assuming the 90 days trading horizon Fidelity Sustainable is expected to generate 2.58 times less return on investment than Vienna Insurance. But when comparing it to its historical volatility, Fidelity Sustainable USD is 2.43 times less risky than Vienna Insurance. It trades about 0.17 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,855 in Vienna Insurance Group on September 13, 2024 and sell it today you would earn a total of 93.00 from holding Vienna Insurance Group or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Sustainable USD vs. Vienna Insurance Group
Performance |
| Timeline |
| Fidelity Sustainable USD |
| Vienna Insurance |
Fidelity Sustainable and Vienna Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Sustainable and Vienna Insurance
The main advantage of trading using opposite Fidelity Sustainable and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Sustainable 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.The idea behind Fidelity Sustainable USD and Vienna Insurance Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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