Correlation Between VIENNA INSURANCE and American States

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

Diversification Opportunities for VIENNA INSURANCE and American States

0.0

Correlation Coefficient

VIENNA INSURANCE  American States

Pay attention - limited upside

The 3 months correlation between VIENNA and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VIENNA INSURANCE GR and American States Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American States Water 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 American States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American States Water has no effect on the direction of VIENNA INSURANCE i.e., VIENNA INSURANCE and American States go up and down completely randomly.

Pair Corralation between VIENNA INSURANCE and American States

If you would invest  3,025  in VIENNA INSURANCE GR on December 25, 2024 and sell it today you would earn a total of  920.00  from holding VIENNA INSURANCE GR or generate 30.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

VIENNA INSURANCE GR  vs.  American States Water

VIENNA INSURANCE

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in VIENNA INSURANCE GR are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VIENNA INSURANCE unveiled solid returns over the last few months and may actually be approaching a breakup point.

American States Water

Risk-Adjusted Performance

Very Weak

Over the last 90 days American States Water has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, American States is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with VIENNA INSURANCE and American States

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

The idea behind VIENNA INSURANCE GR and American States Water 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.