Correlation Between VIENNA INSURANCE and ELECTRONIC ARTS

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

Diversification Opportunities for VIENNA INSURANCE and ELECTRONIC ARTS

-0.44

Correlation Coefficient

VIENNA INSURANCE  ELECTRONIC ARTS

Very good diversification

The 3 months correlation between VIENNA and ELECTRONIC is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding VIENNA INSURANCE GR and ELECTRONIC ARTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECTRONIC ARTS 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 ELECTRONIC ARTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELECTRONIC ARTS has no effect on the direction of VIENNA INSURANCE i.e., VIENNA INSURANCE and ELECTRONIC ARTS go up and down completely randomly.

Pair Corralation between VIENNA INSURANCE and ELECTRONIC ARTS

Assuming the 90 days trading horizon VIENNA INSURANCE is expected to generate 12.37 times less return on investment than ELECTRONIC ARTS. But when comparing it to its historical volatility, VIENNA INSURANCE GR is 1.46 times less risky than ELECTRONIC ARTS. It trades about 0.02 of its potential returns per unit of risk. ELECTRONIC ARTS is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  12,816  in ELECTRONIC ARTS on October 1, 2024 and sell it today you would earn a total of  1,452  from holding ELECTRONIC ARTS or generate 11.33% 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 GR  vs.  ELECTRONIC ARTS

VIENNA INSURANCE

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VIENNA INSURANCE GR are ranked lower than 1 (%) 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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

ELECTRONIC ARTS

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ELECTRONIC ARTS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, ELECTRONIC ARTS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with VIENNA INSURANCE and ELECTRONIC ARTS

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

The idea behind VIENNA INSURANCE GR and ELECTRONIC ARTS 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.