Correlation Between VAT Group and Inficon Holding

Can any of the company-specific risk be diversified away by investing in both VAT Group and Inficon Holding 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 Inficon Holding 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 Inficon Holding, you can compare the effects of market volatilities on VAT Group and Inficon Holding 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 Inficon Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of VAT Group and Inficon Holding.

Diversification Opportunities for VAT Group and Inficon Holding

0.48

Correlation Coefficient

VAT Group  Inficon Holding

Very weak diversification

The 3 months correlation between VAT and Inficon is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding VAT Group AG and Inficon Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inficon Holding 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 Inficon Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inficon Holding has no effect on the direction of VAT Group i.e., VAT Group and Inficon Holding go up and down completely randomly.

Pair Corralation between VAT Group and Inficon Holding

Assuming the 90 days trading horizon VAT Group is expected to generate 1.35 times less return on investment than Inficon Holding. In addition to that, VAT Group is 1.15 times more volatile than Inficon Holding. It trades about 0.13 of its total potential returns per unit of risk. Inficon Holding is currently generating about 0.21 per unit of volatility. If you would invest  8,780  in Inficon Holding on April 24, 2025 and sell it today you would earn a total of  2,000  from holding Inficon Holding or generate 22.78% 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.  Inficon Holding

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.

Inficon Holding

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Inficon Holding are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Inficon Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VAT Group and Inficon Holding

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

The idea behind VAT Group AG and Inficon Holding 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.