Correlation Between Anfield Resources and Vienna Insurance

Can any of the company-specific risk be diversified away by investing in both Anfield Resources 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 Anfield Resources and Vienna Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Anfield Resources and Vienna Insurance Group, you can compare the effects of market volatilities on Anfield Resources 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 Anfield Resources with a short position of Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anfield Resources and Vienna Insurance.

Diversification Opportunities for Anfield Resources and Vienna Insurance

-0.29

Correlation Coefficient

Anfield Resources  Vienna Insurance

Very good diversification

The 3 months correlation between Anfield and Vienna is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Resources and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and Anfield Resources 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 Anfield Resources 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 Anfield Resources i.e., Anfield Resources and Vienna Insurance go up and down completely randomly.

Pair Corralation between Anfield Resources and Vienna Insurance

Assuming the 90 days trading horizon Anfield Resources is expected to generate 10.9 times more return on investment than Vienna Insurance. However, Anfield Resources is 10.9 times more volatile than Vienna Insurance Group. It trades about 0.06 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.06 per unit of risk. If you would invest  4.88  in Anfield Resources on October 22, 2024 and sell it today you would lose (0.03) from holding Anfield Resources or give up 0.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Anfield Resources  vs.  Vienna Insurance Group

Anfield Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anfield Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Vienna Insurance

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Vienna Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Vienna Insurance is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Anfield Resources and Vienna Insurance

The main advantage of trading using opposite Anfield Resources and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anfield Resources 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.

The idea behind Anfield Resources and Vienna Insurance Group 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.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.