Correlation Between VERISK ANLYTCS and VIB Vermgen

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

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

Diversification Opportunities for VERISK ANLYTCS and VIB Vermgen

-0.55

Correlation Coefficient

VERISK ANLYTCS  VIB Vermgen

Excellent diversification

The 3 months correlation between VERISK and VIB is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding VERISK ANLYTCS A and VIB Vermgen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIB Vermgen AG and VERISK ANLYTCS 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 VERISK ANLYTCS A are associated (or correlated) with VIB Vermgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIB Vermgen AG has no effect on the direction of VERISK ANLYTCS i.e., VERISK ANLYTCS and VIB Vermgen go up and down completely randomly.

Pair Corralation between VERISK ANLYTCS and VIB Vermgen

Assuming the 90 days trading horizon VERISK ANLYTCS is expected to generate 2.74 times less return on investment than VIB Vermgen. But when comparing it to its historical volatility, VERISK ANLYTCS A is 2.35 times less risky than VIB Vermgen. It trades about 0.05 of its potential returns per unit of risk. VIB Vermgen AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  876.00  in VIB Vermgen AG on October 4, 2024 and sell it today you would earn a total of  124.00  from holding VIB Vermgen AG or generate 14.16% return on investment over 90 days.

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

VERISK ANLYTCS A  vs.  VIB Vermgen AG

VERISK ANLYTCS A

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VERISK ANLYTCS A are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VERISK ANLYTCS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

VIB Vermgen AG

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with VERISK ANLYTCS and VIB Vermgen

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

The idea behind VERISK ANLYTCS A and VIB Vermgen 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.