Correlation Between IShares ATX and Wiener Privatbank

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

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

Diversification Opportunities for IShares ATX and Wiener Privatbank

0.93

Correlation Coefficient

IShares ATX  Wiener Privatbank

Almost no diversification

The 3 months correlation between IShares and Wiener is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares ATX UCITS and Wiener Privatbank SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wiener Privatbank and IShares ATX 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 iShares ATX UCITS 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 IShares ATX i.e., IShares ATX and Wiener Privatbank go up and down completely randomly.

Pair Corralation between IShares ATX and Wiener Privatbank

Assuming the 90 days trading horizon IShares ATX is expected to generate 1.27 times less return on investment than Wiener Privatbank. But when comparing it to its historical volatility, iShares ATX UCITS is 1.59 times less risky than Wiener Privatbank. It trades about 0.18 of its potential returns per unit of risk. Wiener Privatbank SE is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  685.00  in Wiener Privatbank SE on December 30, 2024 and sell it today you would earn a total of  125.00  from holding Wiener Privatbank SE or generate 18.25% return on investment over 90 days.

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

iShares ATX UCITS  vs.  Wiener Privatbank SE

iShares ATX UCITS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares ATX UCITS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, IShares ATX demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Wiener Privatbank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wiener Privatbank SE are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental drivers, Wiener Privatbank demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares ATX and Wiener Privatbank

The main advantage of trading using opposite IShares ATX and Wiener Privatbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ATX 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 iShares ATX UCITS 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.