Correlation Between Prosiebensat and Vienna Insurance

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

By analyzing existing cross correlation between Prosiebensat 1 Media and Vienna Insurance Group, you can compare the effects of market volatilities on Prosiebensat 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 Prosiebensat with a short position of Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosiebensat and Vienna Insurance.

Diversification Opportunities for Prosiebensat and Vienna Insurance

0.44

Correlation Coefficient

Prosiebensat  Vienna Insurance

Very weak diversification

The 3 months correlation between Prosiebensat and Vienna is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Prosiebensat 1 Media and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and Prosiebensat 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 Prosiebensat 1 Media 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 Prosiebensat i.e., Prosiebensat and Vienna Insurance go up and down completely randomly.

Pair Corralation between Prosiebensat and Vienna Insurance

Assuming the 90 days trading horizon Prosiebensat 1 Media is expected to generate 4.43 times more return on investment than Vienna Insurance. However, Prosiebensat is 4.43 times more volatile than Vienna Insurance Group. It trades about 0.1 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.22 per unit of risk. If you would invest  468.00  in Prosiebensat 1 Media on September 26, 2024 and sell it today you would earn a total of  33.00  from holding Prosiebensat 1 Media or generate 7.05% return on investment over 90 days.

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

Prosiebensat 1 Media  vs.  Vienna Insurance Group

Prosiebensat 1 Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prosiebensat 1 Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Vienna Insurance

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vienna Insurance Group 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.

Pair Trading with Prosiebensat and Vienna Insurance

The main advantage of trading using opposite Prosiebensat and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosiebensat 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 Prosiebensat 1 Media 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.

Check out your portfolio center.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.