Correlation Between VP Bank and Valiant Holding

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

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

Diversification Opportunities for VP Bank and Valiant Holding

-0.13

Correlation Coefficient

VP Bank  Valiant Holding

Good diversification

The 3 months correlation between VPBN and Valiant is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding VP Bank AG and Valiant Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valiant Holding AG and VP Bank 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 VP Bank AG are associated (or correlated) with Valiant Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valiant Holding AG has no effect on the direction of VP Bank i.e., VP Bank and Valiant Holding go up and down completely randomly.

Pair Corralation between VP Bank and Valiant Holding

Assuming the 90 days trading horizon VP Bank is expected to generate 94.29 times less return on investment than Valiant Holding. But when comparing it to its historical volatility, VP Bank AG is 1.07 times less risky than Valiant Holding. It trades about 0.0 of its potential returns per unit of risk. Valiant Holding AG is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  11,470  in Valiant Holding AG on April 24, 2025 and sell it today you would earn a total of  1,470  from holding Valiant Holding AG or generate 12.82% return on investment over 90 days.

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

VP Bank AG  vs.  Valiant Holding AG

VP Bank AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days VP Bank AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, VP Bank is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Valiant Holding AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Valiant Holding AG are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Valiant Holding may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with VP Bank and Valiant Holding

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

The idea behind VP Bank AG and Valiant Holding 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.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.