Correlation Between Monks Investment and Vienna Insurance

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

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

Diversification Opportunities for Monks Investment and Vienna Insurance

0.59

Correlation Coefficient

Monks Investment  Vienna Insurance

Very weak diversification

The 3 months correlation between Monks and Vienna is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Monks Investment Trust and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and Monks Investment 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 Monks Investment Trust 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 Monks Investment i.e., Monks Investment and Vienna Insurance go up and down completely randomly.

Pair Corralation between Monks Investment and Vienna Insurance

Assuming the 90 days trading horizon Monks Investment Trust is expected to under-perform the Vienna Insurance. In addition to that, Monks Investment is 1.19 times more volatile than Vienna Insurance Group. It trades about -0.02 of its total potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.37 per unit of volatility. If you would invest  2,940  in Vienna Insurance Group on December 4, 2024 and sell it today you would earn a total of  670.00  from holding Vienna Insurance Group or generate 22.79% return on investment over 90 days.

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

Monks Investment Trust  vs.  Vienna Insurance Group

Monks Investment Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Monks Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Monks Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Vienna Insurance

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Vienna Insurance Group are ranked lower than 29 (%) 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 Monks Investment and Vienna Insurance

The main advantage of trading using opposite Monks Investment and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monks Investment 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 Monks Investment Trust 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.