Correlation Between Vienna Insurance and Addiko Bank

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

Diversification Opportunities for Vienna Insurance and Addiko Bank

-0.44

Correlation Coefficient

Vienna Insurance  Addiko Bank

Very good diversification

The 3 months correlation between Vienna and Addiko is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and Addiko Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addiko Bank AG 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 Addiko Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addiko Bank AG has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and Addiko Bank go up and down completely randomly.

Pair Corralation between Vienna Insurance and Addiko Bank

Assuming the 90 days trading horizon Vienna Insurance is expected to generate 2.19 times less return on investment than Addiko Bank. But when comparing it to its historical volatility, Vienna Insurance Group is 1.55 times less risky than Addiko Bank. It trades about 0.05 of its potential returns per unit of risk. Addiko Bank AG is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,045  in Addiko Bank AG on September 15, 2024 and sell it today you would earn a total of  840.00  from holding Addiko Bank AG or generate 80.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.4%
Values	Daily Returns

Vienna Insurance Group  vs.  Addiko Bank AG

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. Despite fairly strong technical and fundamental indicators, Vienna Insurance is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Addiko Bank AG

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Addiko Bank AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Addiko Bank demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vienna Insurance and Addiko Bank

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

The idea behind Vienna Insurance Group and Addiko Bank AG 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.