Correlation Between BANKINTER ADR and Vienna Insurance

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

By analyzing existing cross correlation between BANKINTER ADR 2007 and Vienna Insurance Group, you can compare the effects of market volatilities on BANKINTER ADR 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 BANKINTER ADR with a short position of Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANKINTER ADR and Vienna Insurance.

Diversification Opportunities for BANKINTER ADR and Vienna Insurance

-0.12

Correlation Coefficient

BANKINTER ADR  Vienna Insurance

Good diversification

The 3 months correlation between BANKINTER and Vienna is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding BANKINTER ADR 2007 and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and BANKINTER ADR 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 BANKINTER ADR 2007 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 BANKINTER ADR i.e., BANKINTER ADR and Vienna Insurance go up and down completely randomly.

Pair Corralation between BANKINTER ADR and Vienna Insurance

Assuming the 90 days horizon BANKINTER ADR is expected to generate 1.71 times less return on investment than Vienna Insurance. In addition to that, BANKINTER ADR is 1.94 times more volatile than Vienna Insurance Group. It trades about 0.03 of its total potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.1 per unit of volatility. If you would invest  2,905  in Vienna Insurance Group on October 6, 2024 and sell it today you would earn a total of  115.00  from holding Vienna Insurance Group or generate 3.96% return on investment over 90 days.

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

BANKINTER ADR 2007  vs.  Vienna Insurance Group

BANKINTER ADR 2007

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BANKINTER ADR 2007 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, BANKINTER ADR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Vienna Insurance

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vienna Insurance Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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 BANKINTER ADR and Vienna Insurance

The main advantage of trading using opposite BANKINTER ADR and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANKINTER ADR 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 BANKINTER ADR 2007 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.