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 ADR 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

0.0

Correlation Coefficient

Vonovia SE  Vantage Towers

Pay attention - limited upside

The 3 months correlation between Vonovia and Vantage is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vonovia SE ADR 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 ADR 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

If you would invest  2,036  in Vantage Towers AG on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Vantage Towers AG or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Vonovia SE ADR  vs.  Vantage Towers AG

Vonovia SE ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vonovia SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Vantage Towers AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vantage Towers AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Vantage Towers is not utilizing all of its potentials. The current 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 ADR 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.