Correlation Between Carmat SA and Vienna Insurance

Can any of the company-specific risk be diversified away by investing in both Carmat SA and Vienna Insurance 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 Carmat SA and Vienna Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carmat SA and Vienna Insurance Group, you can compare the effects of market volatilities on Carmat SA and Vienna Insurance 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 Carmat SA with a short position of Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and Vienna Insurance.

Diversification Opportunities for Carmat SA and Vienna Insurance

-0.3

Correlation Coefficient

Carmat SA  Vienna Insurance

Very good diversification

The 3 months correlation between Carmat and Vienna is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance and Carmat SA 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 Carmat SA are associated (or correlated) with Vienna Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vienna Insurance has no effect on the direction of Carmat SA i.e., Carmat SA and Vienna Insurance go up and down completely randomly.

Pair Corralation between Carmat SA and Vienna Insurance

Assuming the 90 days horizon Carmat SA is expected to under-perform the Vienna Insurance. In addition to that, Carmat SA is 11.92 times more volatile than Vienna Insurance Group. It trades about -0.05 of its total potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.13 per unit of volatility. If you would invest  3,958  in Vienna Insurance Group on April 25, 2025 and sell it today you would earn a total of  417.00  from holding Vienna Insurance Group or generate 10.54% return on investment over 90 days.

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

Carmat SA  vs.  Vienna Insurance Group

Carmat SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carmat SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Vienna Insurance

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vienna Insurance Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Vienna Insurance may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Carmat SA and Vienna Insurance

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

The idea behind Carmat SA and Vienna Insurance Group 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.