Correlation Between Photon Energy and Vienna Insurance

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

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

Diversification Opportunities for Photon Energy and Vienna Insurance

-0.79

Correlation Coefficient

Photon Energy  Vienna Insurance

Pay attention - limited upside

The 3 months correlation between Photon and Vienna is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Photon Energy NV and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and Photon Energy 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 Photon Energy NV 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 Photon Energy i.e., Photon Energy and Vienna Insurance go up and down completely randomly.

Pair Corralation between Photon Energy and Vienna Insurance

Assuming the 90 days trading horizon Photon Energy NV is expected to under-perform the Vienna Insurance. In addition to that, Photon Energy is 1.55 times more volatile than Vienna Insurance Group. It trades about -0.07 of its total potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.43 per unit of volatility. If you would invest  75,600  in Vienna Insurance Group on December 30, 2024 and sell it today you would earn a total of  26,000  from holding Vienna Insurance Group or generate 34.39% return on investment over 90 days.

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

Photon Energy NV  vs.  Vienna Insurance Group

Photon Energy NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Photon Energy NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail 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 33 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Vienna Insurance reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Photon Energy and Vienna Insurance

The main advantage of trading using opposite Photon Energy and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photon Energy 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 Photon Energy NV 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.