Correlation Between Wiener Privatbank and IShares ATX

Can any of the company-specific risk be diversified away by investing in both Wiener Privatbank and IShares ATX 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 IShares ATX 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 iShares ATX UCITS, you can compare the effects of market volatilities on Wiener Privatbank and IShares ATX 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 IShares ATX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wiener Privatbank and IShares ATX.

Diversification Opportunities for Wiener Privatbank and IShares ATX

0.93

Correlation Coefficient

Wiener Privatbank  IShares ATX

Almost no diversification

The 3 months correlation between Wiener and IShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Wiener Privatbank SE and iShares ATX UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ATX UCITS 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 IShares ATX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ATX UCITS has no effect on the direction of Wiener Privatbank i.e., Wiener Privatbank and IShares ATX go up and down completely randomly.

Pair Corralation between Wiener Privatbank and IShares ATX

Assuming the 90 days trading horizon Wiener Privatbank SE is expected to generate 1.59 times more return on investment than IShares ATX. However, Wiener Privatbank is 1.59 times more volatile than iShares ATX UCITS. It trades about 0.14 of its potential returns per unit of risk. iShares ATX UCITS is currently generating about 0.18 per unit of risk. If you would invest  685.00  in Wiener Privatbank SE on December 30, 2024 and sell it today you would earn a total of  125.00  from holding Wiener Privatbank SE or generate 18.25% return on investment over 90 days.

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

Wiener Privatbank SE  vs.  iShares ATX UCITS

Wiener Privatbank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wiener Privatbank SE are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental drivers, Wiener Privatbank demonstrated solid returns over the last few months and may actually be approaching a breakup point.

iShares ATX UCITS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares ATX UCITS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, IShares ATX demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wiener Privatbank and IShares ATX

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

The idea behind Wiener Privatbank SE and iShares ATX UCITS 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.