Correlation Between Vienna Insurance and Kingdee International
Can any of the company-specific risk be diversified away by investing in both Vienna Insurance and Kingdee International 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 Kingdee International 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 Kingdee International Software, you can compare the effects of market volatilities on Vienna Insurance and Kingdee International 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 Kingdee International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vienna Insurance and Kingdee International.
Diversification Opportunities for Vienna Insurance and Kingdee International
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vienna and Kingdee is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee International 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 Kingdee International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingdee International has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and Kingdee International go up and down completely randomly.
Pair Corralation between Vienna Insurance and Kingdee International
Assuming the 90 days trading horizon Vienna Insurance Group is expected to generate 0.35 times more return on investment than Kingdee International. However, Vienna Insurance Group is 2.84 times less risky than Kingdee International. It trades about 0.25 of its potential returns per unit of risk. Kingdee International Software is currently generating about -0.35 per unit of risk. If you would invest 2,935 in Vienna Insurance Group on October 13, 2024 and sell it today you would earn a total of 100.00 from holding Vienna Insurance Group or generate 3.41% 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. Kingdee International Software
Performance |
| Timeline |
| Vienna Insurance |
| Kingdee International |
Vienna Insurance and Kingdee International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vienna Insurance and Kingdee International
The main advantage of trading using opposite Vienna Insurance and Kingdee International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vienna Insurance position performs unexpectedly, Kingdee International 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 Kingdee International will offset losses from the drop in Kingdee International's long position.| Vienna Insurance vs. GLOBUS MEDICAL A | Vienna Insurance vs. SPECTRAL MEDICAL | Vienna Insurance vs. SERI INDUSTRIAL EO | Vienna Insurance vs. ARDAGH METAL PACDL 0001 |
| Kingdee International vs. Direct Line Insurance | Kingdee International vs. Vienna Insurance Group | Kingdee International vs. EPSILON HEALTHCARE LTD | Kingdee International vs. Zurich 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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