Correlation Between Vienna Insurance and ARISTOCRAT LEISURE
Can any of the company-specific risk be diversified away by investing in both Vienna Insurance and ARISTOCRAT LEISURE 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 Vienna Insurance and ARISTOCRAT LEISURE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vienna Insurance Group and ARISTOCRAT LEISURE, you can compare the effects of market volatilities on Vienna Insurance and ARISTOCRAT LEISURE 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 Vienna Insurance with a short position of ARISTOCRAT LEISURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vienna Insurance and ARISTOCRAT LEISURE.
Diversification Opportunities for Vienna Insurance and ARISTOCRAT LEISURE
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vienna and ARISTOCRAT is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and ARISTOCRAT LEISURE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARISTOCRAT LEISURE and Vienna Insurance 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 Vienna Insurance Group are associated (or correlated) with ARISTOCRAT LEISURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARISTOCRAT LEISURE has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and ARISTOCRAT LEISURE go up and down completely randomly.
Pair Corralation between Vienna Insurance and ARISTOCRAT LEISURE
Assuming the 90 days trading horizon Vienna Insurance is expected to generate 1.24 times less return on investment than ARISTOCRAT LEISURE. But when comparing it to its historical volatility, Vienna Insurance Group is 1.16 times less risky than ARISTOCRAT LEISURE. It trades about 0.19 of its potential returns per unit of risk. ARISTOCRAT LEISURE is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 4,160 in ARISTOCRAT LEISURE on October 10, 2024 and sell it today you would earn a total of 140.00 from holding ARISTOCRAT LEISURE or generate 3.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Vienna Insurance Group vs. ARISTOCRAT LEISURE
Performance |
Timeline |
Vienna Insurance |
ARISTOCRAT LEISURE |
Vienna Insurance and ARISTOCRAT LEISURE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vienna Insurance and ARISTOCRAT LEISURE
The main advantage of trading using opposite Vienna Insurance and ARISTOCRAT LEISURE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vienna Insurance position performs unexpectedly, ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE will offset losses from the drop in ARISTOCRAT LEISURE's long position.Vienna Insurance vs. Inspire Medical Systems | Vienna Insurance vs. Zijin Mining Group | Vienna Insurance vs. Diamyd Medical AB | Vienna Insurance vs. ONWARD MEDICAL BV |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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