Correlation Between Vienna Insurance and APPLIED MATERIALS
Can any of the company-specific risk be diversified away by investing in both Vienna Insurance and APPLIED MATERIALS 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 APPLIED MATERIALS 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 APPLIED MATERIALS, you can compare the effects of market volatilities on Vienna Insurance and APPLIED MATERIALS 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 APPLIED MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vienna Insurance and APPLIED MATERIALS.
Diversification Opportunities for Vienna Insurance and APPLIED MATERIALS
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vienna and APPLIED is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and APPLIED MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLIED MATERIALS 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 APPLIED MATERIALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLIED MATERIALS has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and APPLIED MATERIALS go up and down completely randomly.
Pair Corralation between Vienna Insurance and APPLIED MATERIALS
Assuming the 90 days trading horizon Vienna Insurance is expected to generate 2.63 times less return on investment than APPLIED MATERIALS. But when comparing it to its historical volatility, Vienna Insurance Group is 1.92 times less risky than APPLIED MATERIALS. It trades about 0.21 of its potential returns per unit of risk. APPLIED MATERIALS is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 15,902 in APPLIED MATERIALS on October 11, 2024 and sell it today you would earn a total of 1,294 from holding APPLIED MATERIALS or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vienna Insurance Group vs. APPLIED MATERIALS
Performance |
| Timeline |
| Vienna Insurance |
| APPLIED MATERIALS |
Vienna Insurance and APPLIED MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vienna Insurance and APPLIED MATERIALS
The main advantage of trading using opposite Vienna Insurance and APPLIED MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vienna Insurance position performs unexpectedly, APPLIED MATERIALS 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 APPLIED MATERIALS will offset losses from the drop in APPLIED MATERIALS's long position.| Vienna Insurance vs. Inspire Medical Systems | Vienna Insurance vs. Zijin Mining Group | Vienna Insurance vs. Diamyd Medical AB | Vienna Insurance vs. ONWARD MEDICAL BV |
| APPLIED MATERIALS vs. Renesas Electronics | APPLIED MATERIALS vs. SBI Insurance Group | APPLIED MATERIALS vs. ZURICH INSURANCE GROUP | APPLIED MATERIALS vs. Vienna Insurance 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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