Correlation Between Viridian Therapeutics and Vienna Insurance

Can any of the company-specific risk be diversified away by investing in both Viridian Therapeutics and Vienna Insurance 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 Viridian Therapeutics and Vienna Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Viridian Therapeutics and Vienna Insurance Group, you can compare the effects of market volatilities on Viridian Therapeutics and Vienna Insurance 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 Viridian Therapeutics with a short position of Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viridian Therapeutics and Vienna Insurance.

Diversification Opportunities for Viridian Therapeutics and Vienna Insurance

-0.57

Correlation Coefficient

Viridian Therapeutics  Vienna Insurance

Excellent diversification

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

Pair Corralation between Viridian Therapeutics and Vienna Insurance

Assuming the 90 days trading horizon Viridian Therapeutics is expected to generate 5.39 times more return on investment than Vienna Insurance. However, Viridian Therapeutics is 5.39 times more volatile than Vienna Insurance Group. It trades about 0.14 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about -0.13 per unit of risk. If you would invest  1,486  in Viridian Therapeutics on September 2, 2024 and sell it today you would earn a total of  696.00  from holding Viridian Therapeutics or generate 46.84% return on investment over 90 days.

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

Viridian Therapeutics  vs.  Vienna Insurance Group

Viridian Therapeutics

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Viridian Therapeutics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Viridian Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Vienna Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vienna Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Viridian Therapeutics and Vienna Insurance

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

The idea behind Viridian Therapeutics and Vienna Insurance Group 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.