Correlation Between Imperial Metals and Vienna Insurance
Can any of the company-specific risk be diversified away by investing in both Imperial Metals 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 Imperial Metals and Vienna Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Metals and Vienna Insurance Group, you can compare the effects of market volatilities on Imperial Metals 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 Imperial Metals with a short position of Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Metals and Vienna Insurance.
Diversification Opportunities for Imperial Metals and Vienna Insurance
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Imperial and Vienna is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Metals and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and Imperial Metals 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 Imperial Metals 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 Imperial Metals i.e., Imperial Metals and Vienna Insurance go up and down completely randomly.
Pair Corralation between Imperial Metals and Vienna Insurance
Assuming the 90 days horizon Imperial Metals is expected to generate 3.37 times more return on investment than Vienna Insurance. However, Imperial Metals is 3.37 times more volatile than Vienna Insurance Group. It trades about 0.07 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 119.00 in Imperial Metals on November 6, 2024 and sell it today you would earn a total of 12.00 from holding Imperial Metals or generate 10.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imperial Metals vs. Vienna Insurance Group
Performance |
| Timeline |
| Imperial Metals |
| Vienna Insurance |
Imperial Metals and Vienna Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Metals and Vienna Insurance
The main advantage of trading using opposite Imperial Metals and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Metals 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.| Imperial Metals vs. PRECISION DRILLING P | Imperial Metals vs. ANTA SPORTS PRODUCT | Imperial Metals vs. COLUMBIA SPORTSWEAR | Imperial Metals vs. Benchmark Electronics |
| Vienna Insurance vs. Zijin Mining Group | Vienna Insurance vs. Mitsui Chemicals | Vienna Insurance vs. FIREWEED METALS P | Vienna Insurance vs. AIR PRODCHEMICALS |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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