Correlation Between Vienna Insurance and Bankers Investment

Can any of the company-specific risk be diversified away by investing in both Vienna Insurance and Bankers Investment 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 Bankers Investment 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 Bankers Investment Trust, you can compare the effects of market volatilities on Vienna Insurance and Bankers Investment 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 Bankers Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vienna Insurance and Bankers Investment.

Diversification Opportunities for Vienna Insurance and Bankers Investment

-0.21

Correlation Coefficient

Vienna Insurance  Bankers Investment

Very good diversification

The 3 months correlation between Vienna and Bankers is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and Bankers Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankers Investment Trust 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 Bankers Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankers Investment Trust has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and Bankers Investment go up and down completely randomly.

Pair Corralation between Vienna Insurance and Bankers Investment

Assuming the 90 days trading horizon Vienna Insurance Group is expected to under-perform the Bankers Investment. In addition to that, Vienna Insurance is 1.1 times more volatile than Bankers Investment Trust. It trades about 0.0 of its total potential returns per unit of risk. Bankers Investment Trust is currently generating about 0.02 per unit of volatility. If you would invest  11,342  in Bankers Investment Trust on October 1, 2024 and sell it today you would earn a total of  178.00  from holding Bankers Investment Trust or generate 1.57% 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.  Bankers Investment Trust

Vienna Insurance

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vienna Insurance Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Vienna Insurance is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Bankers Investment Trust

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bankers Investment Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Bankers Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vienna Insurance and Bankers Investment

The main advantage of trading using opposite Vienna Insurance and Bankers Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vienna Insurance position performs unexpectedly, Bankers Investment 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 Bankers Investment will offset losses from the drop in Bankers Investment's long position.

The idea behind Vienna Insurance Group and Bankers Investment Trust 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.