Correlation Between Wiener Privatbank and BKS Bank

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

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

Diversification Opportunities for Wiener Privatbank and BKS Bank

0.14

Correlation Coefficient

Wiener Privatbank  BKS Bank

Average diversification

The 3 months correlation between Wiener and BKS is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Wiener Privatbank SE and BKS Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKS Bank AG and Wiener Privatbank 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 Wiener Privatbank SE are associated (or correlated) with BKS Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKS Bank AG has no effect on the direction of Wiener Privatbank i.e., Wiener Privatbank and BKS Bank go up and down completely randomly.

Pair Corralation between Wiener Privatbank and BKS Bank

Assuming the 90 days trading horizon Wiener Privatbank SE is expected to generate 0.95 times more return on investment than BKS Bank. However, Wiener Privatbank SE is 1.05 times less risky than BKS Bank. It trades about 0.11 of its potential returns per unit of risk. BKS Bank AG is currently generating about -0.08 per unit of risk. If you would invest  730.00  in Wiener Privatbank SE on September 5, 2024 and sell it today you would earn a total of  35.00  from holding Wiener Privatbank SE or generate 4.79% return on investment over 90 days.

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

Wiener Privatbank SE  vs.  BKS Bank AG

Wiener Privatbank

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wiener Privatbank SE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, Wiener Privatbank is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

BKS Bank AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BKS Bank AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, BKS 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 Wiener Privatbank and BKS Bank

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

The idea behind Wiener Privatbank SE and BKS Bank 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.