Correlation Between Vienna Insurance and Fortescue Metals

Can any of the company-specific risk be diversified away by investing in both Vienna Insurance and Fortescue Metals 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 Vienna Insurance and Fortescue Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Vienna Insurance and Fortescue Metals

0.33

Correlation Coefficient

Vienna Insurance  Fortescue Metals

Weak diversification

The 3 months correlation between Vienna and Fortescue is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and Fortescue Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortescue Metals and Vienna Insurance 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 Vienna Insurance Group are associated (or correlated) with Fortescue Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortescue Metals has no effect on the direction of Vienna Insurance i.e., Vienna Insurance and Fortescue Metals go up and down completely randomly.

Pair Corralation between Vienna Insurance and Fortescue Metals

Assuming the 90 days trading horizon Vienna Insurance Group is expected to generate 0.69 times more return on investment than Fortescue Metals. However, Vienna Insurance Group is 1.45 times less risky than Fortescue Metals. It trades about 0.17 of its potential returns per unit of risk. Fortescue Metals Group is currently generating about 0.1 per unit of risk. If you would invest  3,871  in Vienna Insurance Group on April 22, 2025 and sell it today you would earn a total of  589.00  from holding Vienna Insurance Group or generate 15.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Vienna Insurance Group  vs.  Fortescue Metals Group

Vienna Insurance

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vienna Insurance Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Vienna Insurance reported solid returns over the last few months and may actually be approaching a breakup point.

Fortescue Metals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fortescue Metals Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Fortescue Metals may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Vienna Insurance and Fortescue Metals

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

The idea behind Vienna Insurance Group and Fortescue Metals Group 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.