Correlation Between Primoco UAV and Vienna Insurance

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

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

Diversification Opportunities for Primoco UAV and Vienna Insurance

-0.61

Correlation Coefficient

Primoco UAV  Vienna Insurance

Excellent diversification

The 3 months correlation between Primoco and Vienna is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Primoco UAV SE and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and Primoco UAV 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 Primoco UAV SE 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 Primoco UAV i.e., Primoco UAV and Vienna Insurance go up and down completely randomly.

Pair Corralation between Primoco UAV and Vienna Insurance

Assuming the 90 days trading horizon Primoco UAV SE is expected to under-perform the Vienna Insurance. In addition to that, Primoco UAV is 1.1 times more volatile than Vienna Insurance Group. It trades about -0.06 of its total potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.31 per unit of volatility. If you would invest  73,000  in Vienna Insurance Group on November 19, 2024 and sell it today you would earn a total of  12,000  from holding Vienna Insurance Group or generate 16.44% return on investment over 90 days.

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

Primoco UAV SE  vs.  Vienna Insurance Group

Primoco UAV SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days Primoco UAV SE has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Primoco UAV is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Vienna Insurance

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vienna Insurance Group are ranked lower than 24 (%) 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 Primoco UAV and Vienna Insurance

The main advantage of trading using opposite Primoco UAV and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primoco UAV 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 Primoco UAV SE 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.