Correlation Between Voestalpine and Vienna Insurance
Can any of the company-specific risk be diversified away by investing in both Voestalpine 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 Voestalpine and Vienna Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voestalpine AG and Vienna Insurance Group, you can compare the effects of market volatilities on Voestalpine 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 Voestalpine with a short position of Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voestalpine and Vienna Insurance.
Diversification Opportunities for Voestalpine and Vienna Insurance
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Voestalpine and Vienna is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Voestalpine AG and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and Voestalpine 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 Voestalpine AG 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 Voestalpine i.e., Voestalpine and Vienna Insurance go up and down completely randomly.
Pair Corralation between Voestalpine and Vienna Insurance
Assuming the 90 days trading horizon Voestalpine AG is expected to under-perform the Vienna Insurance. In addition to that, Voestalpine is 2.22 times more volatile than Vienna Insurance Group. It trades about -0.17 of its total potential returns per unit of risk. Vienna Insurance Group is currently generating about -0.05 per unit of volatility. If you would invest 2,975 in Vienna Insurance Group on August 26, 2024 and sell it today you would lose (65.00) from holding Vienna Insurance Group or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voestalpine AG vs. Vienna Insurance Group
Performance |
| Timeline |
| Voestalpine AG |
| Vienna Insurance |
Voestalpine and Vienna Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voestalpine and Vienna Insurance
The main advantage of trading using opposite Voestalpine and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voestalpine 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.| Voestalpine vs. OMV Aktiengesellschaft | Voestalpine vs. Raiffeisen Bank International | Voestalpine vs. Andritz AG | Voestalpine vs. VERBUND AG |
| Vienna Insurance vs. Erste Group Bank | Vienna Insurance vs. UNIQA Insurance Group | Vienna Insurance vs. Raiffeisen Bank International | Vienna Insurance vs. Voestalpine AG |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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