Correlation Between VZ Holding and Partners Group

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

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

Diversification Opportunities for VZ Holding and Partners Group

0.05

Correlation Coefficient

VZ Holding  Partners Group

Significant diversification

The 3 months correlation between VZN and Partners is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding VZ Holding AG and Partners Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Partners Group Holding and VZ 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 VZ Holding AG are associated (or correlated) with Partners Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Partners Group Holding has no effect on the direction of VZ Holding i.e., VZ Holding and Partners Group go up and down completely randomly.

Pair Corralation between VZ Holding and Partners Group

Assuming the 90 days trading horizon VZ Holding AG is expected to generate 0.73 times more return on investment than Partners Group. However, VZ Holding AG is 1.37 times less risky than Partners Group. It trades about 0.21 of its potential returns per unit of risk. Partners Group Holding is currently generating about 0.05 per unit of risk. If you would invest  14,400  in VZ Holding AG on December 30, 2024 and sell it today you would earn a total of  2,500  from holding VZ Holding AG or generate 17.36% return on investment over 90 days.

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

VZ Holding AG  vs.  Partners Group Holding

VZ Holding AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VZ Holding AG are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, VZ Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Partners Group Holding

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Partners Group Holding are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Partners Group is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with VZ Holding and Partners Group

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

The idea behind VZ Holding AG and Partners Group Holding 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.