Correlation Between Vonovia SE and Vantage Towers

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

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

Diversification Opportunities for Vonovia SE and Vantage Towers

-0.06

Correlation Coefficient

Vonovia SE  Vantage Towers

Good diversification

The 3 months correlation between Vonovia and Vantage is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Vonovia SE and Vantage Towers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vantage Towers AG and Vonovia SE 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 Vonovia SE are associated (or correlated) with Vantage Towers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vantage Towers AG has no effect on the direction of Vonovia SE i.e., Vonovia SE and Vantage Towers go up and down completely randomly.

Pair Corralation between Vonovia SE and Vantage Towers

Assuming the 90 days horizon Vonovia SE is expected to under-perform the Vantage Towers. In addition to that, Vonovia SE is 6.06 times more volatile than Vantage Towers AG. It trades about -0.02 of its total potential returns per unit of risk. Vantage Towers AG is currently generating about 0.12 per unit of volatility. If you would invest  1,954  in Vantage Towers AG on September 3, 2024 and sell it today you would earn a total of  82.00  from holding Vantage Towers AG or generate 4.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Vonovia SE  vs.  Vantage Towers AG

Vonovia SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vonovia SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Vonovia SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Vantage Towers AG

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vantage Towers AG are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Vantage Towers is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vonovia SE and Vantage Towers

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

The idea behind Vonovia SE and Vantage Towers 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.