Correlation Between Vienna Insurance and SAB Finance

Can any of the company-specific risk be diversified away by investing in both Vienna Insurance and SAB Finance 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 SAB Finance 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 SAB Finance as, you can compare the effects of market volatilities on Vienna Insurance and SAB Finance 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 SAB Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vienna Insurance and SAB Finance.

Diversification Opportunities for Vienna Insurance and SAB Finance

0.59

Correlation Coefficient

Vienna Insurance  SAB Finance

Very weak diversification

The 3 months correlation between Vienna and SAB is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and SAB Finance as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAB Finance as 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 SAB Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAB Finance as has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and SAB Finance go up and down completely randomly.

Pair Corralation between Vienna Insurance and SAB Finance

Assuming the 90 days trading horizon Vienna Insurance Group is expected to under-perform the SAB Finance. In addition to that, Vienna Insurance is 1.18 times more volatile than SAB Finance as. It trades about -0.14 of its total potential returns per unit of risk. SAB Finance as is currently generating about -0.04 per unit of volatility. If you would invest  107,000  in SAB Finance as on August 31, 2024 and sell it today you would lose (2,000) from holding SAB Finance as or give up 1.87% of portfolio value over 90 days.

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

Vienna Insurance Group  vs.  SAB Finance as

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 latest weak performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

SAB Finance as

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SAB Finance as has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, SAB Finance is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Vienna Insurance and SAB Finance

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

The idea behind Vienna Insurance Group and SAB Finance as 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.