Correlation Between VIENNA INSURANCE and Mühlbauer Holding

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

Diversification Opportunities for VIENNA INSURANCE and Mühlbauer Holding

0.64

Correlation Coefficient

VIENNA INSURANCE  Mühlbauer Holding

Poor diversification

The 3 months correlation between VIENNA and Mühlbauer is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding VIENNA INSURANCE GR and Mhlbauer Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mühlbauer Holding 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 Mühlbauer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mühlbauer Holding has no effect on the direction of VIENNA INSURANCE i.e., VIENNA INSURANCE and Mühlbauer Holding go up and down completely randomly.

Pair Corralation between VIENNA INSURANCE and Mühlbauer Holding

Assuming the 90 days trading horizon VIENNA INSURANCE GR is expected to generate 0.81 times more return on investment than Mühlbauer Holding. However, VIENNA INSURANCE GR is 1.24 times less risky than Mühlbauer Holding. It trades about 0.38 of its potential returns per unit of risk. Mhlbauer Holding AG is currently generating about 0.09 per unit of risk. If you would invest  3,025  in VIENNA INSURANCE GR on December 24, 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	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

VIENNA INSURANCE GR  vs.  Mhlbauer Holding AG

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 29 (%) 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.

Mühlbauer Holding

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mhlbauer Holding AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, Mühlbauer Holding may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with VIENNA INSURANCE and Mühlbauer Holding

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

The idea behind VIENNA INSURANCE GR and Mhlbauer Holding AG 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.