Correlation Between Siegfried Holding and VZ Holding

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

By analyzing existing cross correlation between Siegfried Holding and VZ Holding AG, you can compare the effects of market volatilities on Siegfried Holding and VZ Holding 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 Siegfried Holding with a short position of VZ Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siegfried Holding and VZ Holding.

Diversification Opportunities for Siegfried Holding and VZ Holding

-0.28

Correlation Coefficient

Siegfried Holding  VZ Holding

Very good diversification

The 3 months correlation between Siegfried and VZN is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Siegfried Holding and VZ Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VZ Holding AG and Siegfried Holding 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 Siegfried Holding are associated (or correlated) with VZ Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VZ Holding AG has no effect on the direction of Siegfried Holding i.e., Siegfried Holding and VZ Holding go up and down completely randomly.

Pair Corralation between Siegfried Holding and VZ Holding

Assuming the 90 days trading horizon Siegfried Holding is expected to under-perform the VZ Holding. In addition to that, Siegfried Holding is 1.59 times more volatile than VZ Holding AG. It trades about -0.3 of its total potential returns per unit of risk. VZ Holding AG is currently generating about 0.06 per unit of volatility. If you would invest  14,680  in VZ Holding AG on October 5, 2024 and sell it today you would earn a total of  180.00  from holding VZ Holding AG or generate 1.23% return on investment over 90 days.

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

Siegfried Holding  vs.  VZ Holding AG

Siegfried Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siegfried Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

VZ Holding AG

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days VZ Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, VZ Holding may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Siegfried Holding and VZ Holding

The main advantage of trading using opposite Siegfried Holding and VZ Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siegfried Holding position performs unexpectedly, VZ Holding 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 VZ Holding will offset losses from the drop in VZ Holding's long position.

The idea behind Siegfried Holding and VZ Holding AG 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.