Correlation Between Vantage Towers and Vonovia SE

Can any of the company-specific risk be diversified away by investing in both Vantage Towers and Vonovia SE 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 Vantage Towers and Vonovia SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vantage Towers AG and Vonovia SE, you can compare the effects of market volatilities on Vantage Towers and Vonovia SE 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 Vantage Towers with a short position of Vonovia SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vantage Towers and Vonovia SE.

Diversification Opportunities for Vantage Towers and Vonovia SE

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Correlation Coefficient

Vantage Towers  Vonovia SE

Pay attention - limited upside

The 3 months correlation between Vantage and Vonovia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vantage Towers AG and Vonovia SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vonovia SE and Vantage Towers 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 Vantage Towers AG are associated (or correlated) with Vonovia SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vonovia SE has no effect on the direction of Vantage Towers i.e., Vantage Towers and Vonovia SE go up and down completely randomly.

Pair Corralation between Vantage Towers and Vonovia SE

Assuming the 90 days horizon Vantage Towers AG is expected to generate 0.21 times more return on investment than Vonovia SE. However, Vantage Towers AG is 4.66 times less risky than Vonovia SE. It trades about 0.0 of its potential returns per unit of risk. Vonovia SE is currently generating about -0.02 per unit of risk. If you would invest  3,857  in Vantage Towers AG on September 4, 2024 and sell it today you would lose (3.00) from holding Vantage Towers AG or give up 0.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Vantage Towers AG  vs.  Vonovia SE

Vantage Towers AG

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Vantage Towers AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Vantage Towers is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Vonovia SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vonovia SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Vonovia SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Vantage Towers and Vonovia SE

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

The idea behind Vantage Towers AG and Vonovia SE 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.