Correlation Between VIENNA INSURANCE and Constellation Energy

Can any of the company-specific risk be diversified away by investing in both VIENNA INSURANCE and Constellation Energy 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 Constellation Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VIENNA INSURANCE GR and Constellation Energy, you can compare the effects of market volatilities on VIENNA INSURANCE and Constellation Energy 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 Constellation Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIENNA INSURANCE and Constellation Energy.

Diversification Opportunities for VIENNA INSURANCE and Constellation Energy

0.69

Correlation Coefficient

VIENNA INSURANCE  Constellation Energy

Poor diversification

The 3 months correlation between VIENNA and Constellation is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding VIENNA INSURANCE GR and Constellation Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Energy 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 GR are associated (or correlated) with Constellation Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Energy has no effect on the direction of VIENNA INSURANCE i.e., VIENNA INSURANCE and Constellation Energy go up and down completely randomly.

Pair Corralation between VIENNA INSURANCE and Constellation Energy

Assuming the 90 days trading horizon VIENNA INSURANCE is expected to generate 12.7 times less return on investment than Constellation Energy. But when comparing it to its historical volatility, VIENNA INSURANCE GR is 6.7 times less risky than Constellation Energy. It trades about 0.06 of its potential returns per unit of risk. Constellation Energy is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  24,904  in Constellation Energy on October 27, 2024 and sell it today you would earn a total of  8,131  from holding Constellation Energy or generate 32.65% return on investment over 90 days.

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

VIENNA INSURANCE GR  vs.  Constellation Energy

VIENNA INSURANCE

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VIENNA INSURANCE GR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, VIENNA INSURANCE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Constellation Energy

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Constellation Energy are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Constellation Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VIENNA INSURANCE and Constellation Energy

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

The idea behind VIENNA INSURANCE GR and Constellation Energy 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.