Correlation Between Vienna Insurance and Air Lease

Can any of the company-specific risk be diversified away by investing in both Vienna Insurance and Air Lease 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 Air Lease 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 Air Lease, you can compare the effects of market volatilities on Vienna Insurance and Air Lease 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 Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vienna Insurance and Air Lease.

Diversification Opportunities for Vienna Insurance and Air Lease

-0.57

Correlation Coefficient

Vienna Insurance  Air Lease

Excellent diversification

The 3 months correlation between Vienna and Air is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease 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 Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and Air Lease go up and down completely randomly.

Pair Corralation between Vienna Insurance and Air Lease

Assuming the 90 days trading horizon Vienna Insurance Group is expected to generate 0.71 times more return on investment than Air Lease. However, Vienna Insurance Group is 1.4 times less risky than Air Lease. It trades about 0.36 of its potential returns per unit of risk. Air Lease is currently generating about -0.07 per unit of risk. If you would invest  2,995  in Vienna Insurance Group on December 20, 2024 and sell it today you would earn a total of  955.00  from holding Vienna Insurance Group or generate 31.89% return on investment over 90 days.

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

Vienna Insurance Group  vs.  Air Lease

Vienna Insurance

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Vienna Insurance Group are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Vienna Insurance reported solid returns over the last few months and may actually be approaching a breakup point.

Air Lease

Risk-Adjusted Performance

Very Weak

Over the last 90 days Air Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Vienna Insurance and Air Lease

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

The idea behind Vienna Insurance Group and Air Lease 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.