Correlation Between Vienna Insurance and Raiffeisen Bank

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

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

Diversification Opportunities for Vienna Insurance and Raiffeisen Bank

-0.12

Correlation Coefficient

Vienna Insurance  Raiffeisen Bank

Good diversification

The 3 months correlation between Vienna and Raiffeisen is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and Raiffeisen Bank International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raiffeisen Bank Inte and Vienna Insurance 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 Vienna Insurance Group are associated (or correlated) with Raiffeisen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raiffeisen Bank Inte has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and Raiffeisen Bank go up and down completely randomly.

Pair Corralation between Vienna Insurance and Raiffeisen Bank

Assuming the 90 days trading horizon Vienna Insurance Group is expected to under-perform the Raiffeisen Bank. But the stock apears to be less risky and, when comparing its historical volatility, Vienna Insurance Group is 2.32 times less risky than Raiffeisen Bank. The stock trades about -0.15 of its potential returns per unit of risk. The Raiffeisen Bank International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,812  in Raiffeisen Bank International on September 2, 2024 and sell it today you would earn a total of  34.00  from holding Raiffeisen Bank International or generate 1.88% return on investment over 90 days.

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

Vienna Insurance Group  vs.  Raiffeisen Bank International

Vienna Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vienna Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Raiffeisen Bank Inte

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Raiffeisen Bank International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Raiffeisen Bank is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Vienna Insurance and Raiffeisen Bank

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

The idea behind Vienna Insurance Group and Raiffeisen Bank International 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.