Correlation Between Eco Animal and Vienna Insurance

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

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

Diversification Opportunities for Eco Animal and Vienna Insurance

0.08

Correlation Coefficient

Eco Animal  Vienna Insurance

Significant diversification

The 3 months correlation between Eco and Vienna is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Eco Animal Health and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and Eco Animal 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 Eco Animal Health 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 Eco Animal i.e., Eco Animal and Vienna Insurance go up and down completely randomly.

Pair Corralation between Eco Animal and Vienna Insurance

Assuming the 90 days trading horizon Eco Animal is expected to generate 1.84 times less return on investment than Vienna Insurance. In addition to that, Eco Animal is 1.44 times more volatile than Vienna Insurance Group. It trades about 0.09 of its total potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.25 per unit of volatility. If you would invest  2,945  in Vienna Insurance Group on October 11, 2024 and sell it today you would earn a total of  80.00  from holding Vienna Insurance Group or generate 2.72% return on investment over 90 days.

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

Eco Animal Health  vs.  Vienna Insurance Group

Eco Animal Health

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eco Animal Health are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Eco Animal 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

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Eco Animal and Vienna Insurance

The main advantage of trading using opposite Eco Animal and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eco Animal 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 Eco Animal Health 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.