Correlation Between Raiffeisen Bank and Wiener Privatbank

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

By analyzing existing cross correlation between Raiffeisen Bank International and Wiener Privatbank SE, you can compare the effects of market volatilities on Raiffeisen Bank and Wiener Privatbank 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 Raiffeisen Bank with a short position of Wiener Privatbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raiffeisen Bank and Wiener Privatbank.

Diversification Opportunities for Raiffeisen Bank and Wiener Privatbank

-0.79

Correlation Coefficient

Raiffeisen Bank  Wiener Privatbank

Pay attention - limited upside

The 3 months correlation between Raiffeisen and Wiener is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Raiffeisen Bank International and Wiener Privatbank SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wiener Privatbank and Raiffeisen 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 Raiffeisen Bank International are associated (or correlated) with Wiener Privatbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wiener Privatbank has no effect on the direction of Raiffeisen Bank i.e., Raiffeisen Bank and Wiener Privatbank go up and down completely randomly.

Pair Corralation between Raiffeisen Bank and Wiener Privatbank

Assuming the 90 days trading horizon Raiffeisen Bank International is expected to under-perform the Wiener Privatbank. But the stock apears to be less risky and, when comparing its historical volatility, Raiffeisen Bank International is 1.04 times less risky than Wiener Privatbank. The stock trades about -0.05 of its potential returns per unit of risk. The Wiener Privatbank SE is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  610.00  in Wiener Privatbank SE on February 10, 2024 and sell it today you would earn a total of  50.00  from holding Wiener Privatbank SE or generate 8.2% return on investment over 90 days.

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

Raiffeisen Bank International  vs.  Wiener Privatbank SE

Raiffeisen Bank Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Raiffeisen Bank International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Wiener Privatbank

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wiener Privatbank SE are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental drivers, Wiener Privatbank demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Raiffeisen Bank and Wiener Privatbank

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

The idea behind Raiffeisen Bank International and Wiener Privatbank SE 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.