Correlation Between 01 Communique and Vienna Insurance

Can any of the company-specific risk be diversified away by investing in both 01 Communique 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 01 Communique and Vienna Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 01 Communique Laboratory and Vienna Insurance Group, you can compare the effects of market volatilities on 01 Communique 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 01 Communique with a short position of Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of 01 Communique and Vienna Insurance.

Diversification Opportunities for 01 Communique and Vienna Insurance

0.24

Correlation Coefficient

01 Communique  Vienna Insurance

Modest diversification

The 3 months correlation between DFK and Vienna is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding 01 Communique Laboratory and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and 01 Communique 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 01 Communique Laboratory 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 01 Communique i.e., 01 Communique and Vienna Insurance go up and down completely randomly.

Pair Corralation between 01 Communique and Vienna Insurance

Assuming the 90 days horizon 01 Communique Laboratory is expected to generate 20.18 times more return on investment than Vienna Insurance. However, 01 Communique is 20.18 times more volatile than Vienna Insurance Group. It trades about 0.11 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.07 per unit of risk. If you would invest  6.40  in 01 Communique Laboratory on September 28, 2024 and sell it today you would earn a total of  12.60  from holding 01 Communique Laboratory or generate 196.87% return on investment over 90 days.

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

01 Communique Laboratory  vs.  Vienna Insurance Group

01 Communique Laboratory

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 01 Communique Laboratory are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, 01 Communique reported solid returns over the last few months and may actually be approaching a breakup point.

Vienna Insurance

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vienna Insurance Group are ranked lower than 1 (%) 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 01 Communique and Vienna Insurance

The main advantage of trading using opposite 01 Communique and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 01 Communique 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 01 Communique Laboratory 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.