Correlation Between VAT Group and Arbonia AG

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

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

Diversification Opportunities for VAT Group and Arbonia AG

-0.8

Correlation Coefficient

VAT Group  Arbonia AG

Pay attention - limited upside

The 3 months correlation between VAT and Arbonia is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding VAT Group AG and Arbonia AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbonia AG and VAT Group 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 VAT Group AG are associated (or correlated) with Arbonia AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbonia AG has no effect on the direction of VAT Group i.e., VAT Group and Arbonia AG go up and down completely randomly.

Pair Corralation between VAT Group and Arbonia AG

Assuming the 90 days trading horizon VAT Group is expected to generate 3.94 times less return on investment than Arbonia AG. In addition to that, VAT Group is 1.06 times more volatile than Arbonia AG. It trades about 0.01 of its total potential returns per unit of risk. Arbonia AG is currently generating about 0.06 per unit of volatility. If you would invest  530.00  in Arbonia AG on April 24, 2025 and sell it today you would earn a total of  11.00  from holding Arbonia AG or generate 2.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

VAT Group AG  vs.  Arbonia AG

VAT Group AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VAT Group AG are ranked lower than 10 (%) 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.

Arbonia AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arbonia AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in August 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with VAT Group and Arbonia AG

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

The idea behind VAT Group AG and Arbonia 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 Transaction History module to view history of all your transactions and understand their impact on performance.