Correlation Between Hong Kong and Vienna Insurance

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

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

Diversification Opportunities for Hong Kong and Vienna Insurance

0.58

Correlation Coefficient

Hong Kong  Vienna Insurance

Very weak diversification

The 3 months correlation between Hong and Vienna is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Land and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and Hong Kong 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 Hong Kong Land 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 Hong Kong i.e., Hong Kong and Vienna Insurance go up and down completely randomly.

Pair Corralation between Hong Kong and Vienna Insurance

Assuming the 90 days trading horizon Hong Kong is expected to generate 14.08 times less return on investment than Vienna Insurance. But when comparing it to its historical volatility, Hong Kong Land is 3.72 times less risky than Vienna Insurance. It trades about 0.13 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest  3,020  in Vienna Insurance Group on December 28, 2024 and sell it today you would earn a total of  1,165  from holding Vienna Insurance Group or generate 38.58% return on investment over 90 days.

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

Hong Kong Land  vs.  Vienna Insurance Group

Hong Kong Land

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hong Kong Land are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Hong Kong is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Vienna Insurance

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Vienna Insurance Group are ranked lower than 37 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Vienna Insurance unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hong Kong and Vienna Insurance

The main advantage of trading using opposite Hong Kong and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong 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 Hong Kong Land 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.