Correlation Between Implenia and VAT Group

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

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

Diversification Opportunities for Implenia and VAT Group

0.85

Correlation Coefficient

Implenia  VAT Group

Very poor diversification

The 3 months correlation between Implenia and VAT is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Implenia AG 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 Implenia 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 Implenia AG 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 Implenia i.e., Implenia and VAT Group go up and down completely randomly.

Pair Corralation between Implenia and VAT Group

Assuming the 90 days trading horizon Implenia AG is expected to generate 0.9 times more return on investment than VAT Group. However, Implenia AG is 1.11 times less risky than VAT Group. It trades about 0.14 of its potential returns per unit of risk. VAT Group AG is currently generating about 0.05 per unit of risk. If you would invest  4,550  in Implenia AG on April 25, 2025 and sell it today you would earn a total of  800.00  from holding Implenia AG or generate 17.58% return on investment over 90 days.

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

Implenia AG  vs.  VAT Group AG

Implenia AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Implenia AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Implenia showed solid returns over the last few months and may actually be approaching a breakup point.

VAT Group AG

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VAT Group AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, VAT Group may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Implenia and VAT Group

The main advantage of trading using opposite Implenia and VAT Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Implenia 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 Implenia AG 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.

Check out your portfolio center.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.