Correlation Between Wiener Privatbank and Addiko Bank
Can any of the company-specific risk be diversified away by investing in both Wiener Privatbank and Addiko Bank 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 Wiener Privatbank and Addiko Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wiener Privatbank SE and Addiko Bank AG, you can compare the effects of market volatilities on Wiener Privatbank and Addiko Bank 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 Wiener Privatbank with a short position of Addiko Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wiener Privatbank and Addiko Bank.
Diversification Opportunities for Wiener Privatbank and Addiko Bank
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Wiener and Addiko is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Wiener Privatbank SE and Addiko Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addiko Bank AG and Wiener Privatbank 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 Wiener Privatbank SE are associated (or correlated) with Addiko Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addiko Bank AG has no effect on the direction of Wiener Privatbank i.e., Wiener Privatbank and Addiko Bank go up and down completely randomly.
Pair Corralation between Wiener Privatbank and Addiko Bank
Assuming the 90 days trading horizon Wiener Privatbank SE is expected to under-perform the Addiko Bank. But the stock apears to be less risky and, when comparing its historical volatility, Wiener Privatbank SE is 6.3 times less risky than Addiko Bank. The stock trades about -0.28 of its potential returns per unit of risk. The Addiko Bank AG is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,610 in Addiko Bank AG on August 25, 2024 and sell it today you would earn a total of 370.00 from holding Addiko Bank AG or generate 22.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.78% |
| Values | Daily Returns |
Wiener Privatbank SE vs. Addiko Bank AG
Performance |
| Timeline |
| Wiener Privatbank |
| Addiko Bank AG |
Wiener Privatbank and Addiko Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wiener Privatbank and Addiko Bank
The main advantage of trading using opposite Wiener Privatbank and Addiko Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wiener Privatbank position performs unexpectedly, Addiko Bank 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 Addiko Bank will offset losses from the drop in Addiko Bank's long position.The idea behind Wiener Privatbank SE and Addiko Bank AG 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.| Addiko Bank vs. Raiffeisen Bank International | Addiko Bank vs. BAWAG Group AG | Addiko Bank vs. Wiener Privatbank SE |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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