Correlation Between BAWAG Group and Wiener Privatbank

Can any of the company-specific risk be diversified away by investing in both BAWAG Group and Wiener Privatbank 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 BAWAG Group and Wiener Privatbank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BAWAG Group AG and Wiener Privatbank SE, you can compare the effects of market volatilities on BAWAG Group and Wiener Privatbank 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 BAWAG Group with a short position of Wiener Privatbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAWAG Group and Wiener Privatbank.

Diversification Opportunities for BAWAG Group and Wiener Privatbank

-0.06

Correlation Coefficient

BAWAG Group  Wiener Privatbank

Good diversification

The 3 months correlation between BAWAG and Wiener is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding BAWAG Group AG and Wiener Privatbank SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wiener Privatbank and BAWAG Group 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 BAWAG Group AG are associated (or correlated) with Wiener Privatbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wiener Privatbank has no effect on the direction of BAWAG Group i.e., BAWAG Group and Wiener Privatbank go up and down completely randomly.

Pair Corralation between BAWAG Group and Wiener Privatbank

Assuming the 90 days horizon BAWAG Group AG is expected to generate 0.78 times more return on investment than Wiener Privatbank. However, BAWAG Group AG is 1.28 times less risky than Wiener Privatbank. It trades about 0.32 of its potential returns per unit of risk. Wiener Privatbank SE is currently generating about 0.01 per unit of risk. If you would invest  7,445  in BAWAG Group AG on December 3, 2024 and sell it today you would earn a total of  2,265  from holding BAWAG Group AG or generate 30.42% return on investment over 90 days.

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

BAWAG Group AG  vs.  Wiener Privatbank SE

BAWAG Group AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BAWAG Group AG are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, BAWAG Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Wiener Privatbank

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wiener Privatbank SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, Wiener Privatbank is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with BAWAG Group and Wiener Privatbank

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

The idea behind BAWAG Group AG and Wiener Privatbank SE 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.