Correlation Between Vienna Insurance and OMV Aktiengesellscha

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

Diversification Opportunities for Vienna Insurance and OMV Aktiengesellscha

-0.13

Correlation Coefficient

Vienna Insurance  OMV Aktiengesellscha

Good diversification

The 3 months correlation between Vienna and OMV is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and OMV Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OMV Aktiengesellschaft 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 OMV Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMV Aktiengesellschaft has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and OMV Aktiengesellscha go up and down completely randomly.

Pair Corralation between Vienna Insurance and OMV Aktiengesellscha

Assuming the 90 days trading horizon Vienna Insurance Group is expected to under-perform the OMV Aktiengesellscha. But the stock apears to be less risky and, when comparing its historical volatility, Vienna Insurance Group is 1.32 times less risky than OMV Aktiengesellscha. The stock trades about -0.15 of its potential returns per unit of risk. The OMV Aktiengesellschaft is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  3,916  in OMV Aktiengesellschaft on August 31, 2024 and sell it today you would lose (126.00) from holding OMV Aktiengesellschaft or give up 3.22% of portfolio value over 90 days.

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

Vienna Insurance Group  vs.  OMV Aktiengesellschaft

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 latest inconsistent performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

OMV Aktiengesellschaft

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OMV Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, OMV Aktiengesellscha is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Vienna Insurance and OMV Aktiengesellscha

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

The idea behind Vienna Insurance Group and OMV Aktiengesellschaft 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 CEOs Directory module to screen CEOs from public companies around the world.