Correlation Between Vienna Insurance and One Media

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

Diversification Opportunities for Vienna Insurance and One Media

0.24

Correlation Coefficient

Vienna Insurance  One Media

Modest diversification

The 3 months correlation between Vienna and One is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and One Media iP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Media iP 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 One Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Media iP has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and One Media go up and down completely randomly.

Pair Corralation between Vienna Insurance and One Media

Assuming the 90 days trading horizon Vienna Insurance Group is expected to generate 0.32 times more return on investment than One Media. However, Vienna Insurance Group is 3.1 times less risky than One Media. It trades about 0.09 of its potential returns per unit of risk. One Media iP is currently generating about 0.02 per unit of risk. If you would invest  2,492  in Vienna Insurance Group on October 2, 2024 and sell it today you would earn a total of  528.00  from holding Vienna Insurance Group or generate 21.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Vienna Insurance Group  vs.  One Media iP

Vienna Insurance

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vienna Insurance Group are ranked lower than 5 (%) 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.

One Media iP

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in One Media iP are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, One Media 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 One Media

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

The idea behind Vienna Insurance Group and One Media iP 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.

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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.