Correlation Between Vienna Insurance and CTP NV

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

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

Diversification Opportunities for Vienna Insurance and CTP NV

0.65

Correlation Coefficient

Vienna Insurance  CTP NV

Poor diversification

The 3 months correlation between Vienna and CTP is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and CTP NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTP NV 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 Group are associated (or correlated) with CTP NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTP NV has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and CTP NV go up and down completely randomly.

Pair Corralation between Vienna Insurance and CTP NV

Assuming the 90 days trading horizon Vienna Insurance Group is expected to generate 0.56 times more return on investment than CTP NV. However, Vienna Insurance Group is 1.78 times less risky than CTP NV. It trades about -0.03 of its potential returns per unit of risk. CTP NV is currently generating about -0.09 per unit of risk. If you would invest  76,000  in Vienna Insurance Group on September 19, 2024 and sell it today you would lose (1,500) from holding Vienna Insurance Group or give up 1.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Vienna Insurance Group  vs.  CTP NV

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. Even with relatively invariable technical and fundamental indicators, Vienna Insurance is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

CTP NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CTP NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Vienna Insurance and CTP NV

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

The idea behind Vienna Insurance Group and CTP NV 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.