Correlation Between Japan Tobacco and VIENNA INSURANCE

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

By analyzing existing cross correlation between Japan Tobacco and VIENNA INSURANCE GR, you can compare the effects of market volatilities on Japan Tobacco 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 Japan Tobacco with a short position of VIENNA INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Tobacco and VIENNA INSURANCE.

Diversification Opportunities for Japan Tobacco and VIENNA INSURANCE

-0.16

Correlation Coefficient

Japan Tobacco  VIENNA INSURANCE

Good diversification

The 3 months correlation between Japan and VIENNA is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Japan Tobacco and VIENNA INSURANCE GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIENNA INSURANCE and Japan Tobacco 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 Japan Tobacco 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 Japan Tobacco i.e., Japan Tobacco and VIENNA INSURANCE go up and down completely randomly.

Pair Corralation between Japan Tobacco and VIENNA INSURANCE

Assuming the 90 days horizon Japan Tobacco is expected to under-perform the VIENNA INSURANCE. But the stock apears to be less risky and, when comparing its historical volatility, Japan Tobacco is 1.02 times less risky than VIENNA INSURANCE. The stock trades about -0.06 of its potential returns per unit of risk. The VIENNA INSURANCE GR is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  3,949  in VIENNA INSURANCE GR on April 25, 2025 and sell it today you would earn a total of  466.00  from holding VIENNA INSURANCE GR or generate 11.8% return on investment over 90 days.

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

Japan Tobacco  vs.  VIENNA INSURANCE GR

Japan Tobacco

Risk-Adjusted Performance

Very Weak

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

VIENNA INSURANCE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VIENNA INSURANCE GR are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, VIENNA INSURANCE may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Japan Tobacco and VIENNA INSURANCE

The main advantage of trading using opposite Japan Tobacco and VIENNA INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Tobacco 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 Japan Tobacco and VIENNA INSURANCE GR 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.