Correlation Between VAT Group and Cembra Money
Can any of the company-specific risk be diversified away by investing in both VAT Group and Cembra Money 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 Cembra Money 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 Cembra Money Bank, you can compare the effects of market volatilities on VAT Group and Cembra Money 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 Cembra Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of VAT Group and Cembra Money.
Diversification Opportunities for VAT Group and Cembra Money
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VAT and Cembra is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding VAT Group AG and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money Bank 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 Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of VAT Group i.e., VAT Group and Cembra Money go up and down completely randomly.
Pair Corralation between VAT Group and Cembra Money
Assuming the 90 days trading horizon VAT Group AG is expected to generate 2.3 times more return on investment than Cembra Money. However, VAT Group is 2.3 times more volatile than Cembra Money Bank. It trades about 0.18 of its potential returns per unit of risk. Cembra Money Bank is currently generating about 0.16 per unit of risk. 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 |
VAT Group AG vs. Cembra Money Bank
Performance |
Timeline |
VAT Group AG |
Cembra Money Bank |
VAT Group and Cembra Money Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with VAT Group and Cembra Money
The main advantage of trading using opposite VAT Group and Cembra Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VAT Group position performs unexpectedly, Cembra Money 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 Cembra Money will offset losses from the drop in Cembra Money's long position.VAT Group vs. Sika AG | VAT Group vs. Straumann Holding AG | VAT Group vs. Geberit AG | VAT Group vs. Partners Group Holding |
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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.
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