Correlation Between RTW Venture and Vienna Insurance
Can any of the company-specific risk be diversified away by investing in both RTW Venture 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 RTW Venture and Vienna Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RTW Venture Fund and Vienna Insurance Group, you can compare the effects of market volatilities on RTW Venture 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 RTW Venture with a short position of Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTW Venture and Vienna Insurance.
Diversification Opportunities for RTW Venture and Vienna Insurance
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RTW and Vienna is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding RTW Venture Fund and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and RTW Venture 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 RTW Venture Fund 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 RTW Venture i.e., RTW Venture and Vienna Insurance go up and down completely randomly.
Pair Corralation between RTW Venture and Vienna Insurance
Assuming the 90 days trading horizon RTW Venture Fund is expected to generate 1.75 times more return on investment than Vienna Insurance. However, RTW Venture is 1.75 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 -0.01 per unit of risk. If you would invest 139.00 in RTW Venture Fund on September 3, 2024 and sell it today you would earn a total of 10.00 from holding RTW Venture Fund or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RTW Venture Fund vs. Vienna Insurance Group
Performance |
| Timeline |
| RTW Venture Fund |
| Vienna Insurance |
RTW Venture and Vienna Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTW Venture and Vienna Insurance
The main advantage of trading using opposite RTW Venture and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTW Venture 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.| RTW Venture vs. Gaztransport et Technigaz | RTW Venture vs. Broadcom | RTW Venture vs. Empire Metals Limited | RTW Venture vs. Cornish Metals |
| Vienna Insurance vs. Catalyst Media Group | Vienna Insurance vs. CATLIN GROUP | Vienna Insurance vs. Magnora ASA | Vienna Insurance vs. RTW Venture Fund |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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