Correlation Between Cembra Money and VAT Group

Can any of the company-specific risk be diversified away by investing in both Cembra Money and VAT Group 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 Cembra Money and VAT Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cembra Money Bank and VAT Group AG, you can compare the effects of market volatilities on Cembra Money and VAT Group 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 Cembra Money with a short position of VAT Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and VAT Group.

Diversification Opportunities for Cembra Money and VAT Group

0.43

Correlation Coefficient

Cembra Money  VAT Group

Very weak diversification

The 3 months correlation between Cembra and VAT is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank and VAT Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VAT Group AG and Cembra Money 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 Cembra Money Bank are associated (or correlated) with VAT Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VAT Group AG has no effect on the direction of Cembra Money i.e., Cembra Money and VAT Group go up and down completely randomly.

Pair Corralation between Cembra Money and VAT Group

Assuming the 90 days trading horizon Cembra Money is expected to generate 2.29 times less return on investment than VAT Group. But when comparing it to its historical volatility, Cembra Money Bank is 2.33 times less risky than VAT Group. It trades about 0.18 of its potential returns per unit of risk. VAT Group AG is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  27,798  in VAT Group AG on April 23, 2025 and sell it today you would earn a total of  6,102  from holding VAT Group AG or generate 21.95% return on investment over 90 days.

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

Cembra Money Bank  vs.  VAT Group AG

Cembra Money Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cembra Money Bank are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Cembra Money may actually be approaching a critical reversion point that can send shares even higher in August 2025.

VAT Group AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VAT Group AG are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, VAT Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cembra Money and VAT Group

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

The idea behind Cembra Money Bank and VAT Group 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.