Correlation Between Aurora Investment and Vienna Insurance

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

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

Diversification Opportunities for Aurora Investment and Vienna Insurance

0.65

Correlation Coefficient

Aurora Investment  Vienna Insurance

Poor diversification

The 3 months correlation between Aurora and Vienna is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Investment Trust and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and Aurora Investment 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 Aurora Investment Trust 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 Aurora Investment i.e., Aurora Investment and Vienna Insurance go up and down completely randomly.

Pair Corralation between Aurora Investment and Vienna Insurance

Assuming the 90 days trading horizon Aurora Investment is expected to generate 10.65 times less return on investment than Vienna Insurance. But when comparing it to its historical volatility, Aurora Investment Trust is 1.04 times less risky than Vienna Insurance. It trades about 0.04 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest  3,020  in Vienna Insurance Group on December 30, 2024 and sell it today you would earn a total of  1,105  from holding Vienna Insurance Group or generate 36.59% return on investment over 90 days.

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

Aurora Investment Trust  vs.  Vienna Insurance Group

Aurora Investment Trust

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Investment Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Aurora Investment is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Vienna Insurance

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Vienna Insurance Group are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Vienna Insurance unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aurora Investment and Vienna Insurance

The main advantage of trading using opposite Aurora Investment and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Investment 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 Aurora Investment Trust 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.