Correlation Between Vienna Insurance and Oberbank
Can any of the company-specific risk be diversified away by investing in both Vienna Insurance and Oberbank 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 Vienna Insurance and Oberbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vienna Insurance Group and Oberbank AG, you can compare the effects of market volatilities on Vienna Insurance and Oberbank 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 Vienna Insurance with a short position of Oberbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vienna Insurance and Oberbank.
Diversification Opportunities for Vienna Insurance and Oberbank
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vienna and Oberbank is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and Oberbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberbank AG and Vienna Insurance 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 Vienna Insurance Group are associated (or correlated) with Oberbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberbank AG has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and Oberbank go up and down completely randomly.
Pair Corralation between Vienna Insurance and Oberbank
Assuming the 90 days trading horizon Vienna Insurance Group is expected to generate 3.1 times more return on investment than Oberbank. However, Vienna Insurance is 3.1 times more volatile than Oberbank AG. It trades about 0.06 of its potential returns per unit of risk. Oberbank AG is currently generating about 0.13 per unit of risk. If you would invest 2,445 in Vienna Insurance Group on August 26, 2024 and sell it today you would earn a total of 465.00 from holding Vienna Insurance Group or generate 19.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vienna Insurance Group vs. Oberbank AG
Performance |
| Timeline |
| Vienna Insurance |
| Oberbank AG |
Vienna Insurance and Oberbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vienna Insurance and Oberbank
The main advantage of trading using opposite Vienna Insurance and Oberbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vienna Insurance position performs unexpectedly, Oberbank 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 Oberbank will offset losses from the drop in Oberbank's long position.| Vienna Insurance vs. Erste Group Bank | Vienna Insurance vs. UNIQA Insurance Group | Vienna Insurance vs. Raiffeisen Bank International | Vienna Insurance vs. Voestalpine AG |
| Oberbank vs. Semperit Aktiengesellschaft Holding | Oberbank vs. Oesterr Post AG | Oberbank vs. Voestalpine AG | Oberbank vs. Universal Music Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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