Correlation Between Flow Traders and Vienna Insurance
Can any of the company-specific risk be diversified away by investing in both Flow Traders 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 Flow Traders and Vienna Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flow Traders NV and Vienna Insurance Group, you can compare the effects of market volatilities on Flow Traders 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 Flow Traders with a short position of Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and Vienna Insurance.
Diversification Opportunities for Flow Traders and Vienna Insurance
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Flow and Vienna is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders NV and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and Flow Traders 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 Flow Traders NV 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 Flow Traders i.e., Flow Traders and Vienna Insurance go up and down completely randomly.
Pair Corralation between Flow Traders and Vienna Insurance
Assuming the 90 days trading horizon Flow Traders NV is expected to generate 1.58 times more return on investment than Vienna Insurance. However, Flow Traders is 1.58 times more volatile than Vienna Insurance Group. It trades about 0.17 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.02 per unit of risk. If you would invest 1,824 in Flow Traders NV on September 26, 2024 and sell it today you would earn a total of 311.00 from holding Flow Traders NV or generate 17.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Flow Traders NV vs. Vienna Insurance Group
Performance |
Timeline |
Flow Traders NV |
Vienna Insurance |
Flow Traders and Vienna Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Flow Traders and Vienna Insurance
The main advantage of trading using opposite Flow Traders and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders 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.Flow Traders vs. Uniper SE | Flow Traders vs. Mulberry Group PLC | Flow Traders vs. London Security Plc | Flow Traders vs. Triad Group PLC |
Vienna Insurance vs. Uniper SE | Vienna Insurance vs. Mulberry Group PLC | Vienna Insurance vs. London Security Plc | Vienna Insurance vs. Triad Group PLC |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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