Correlation Between Electrovaya Common and Virco Manufacturing
Can any of the company-specific risk be diversified away by investing in both Electrovaya Common and Virco Manufacturing 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 Electrovaya Common and Virco Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrovaya Common Shares and Virco Manufacturing, you can compare the effects of market volatilities on Electrovaya Common and Virco Manufacturing 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 Electrovaya Common with a short position of Virco Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrovaya Common and Virco Manufacturing.
Diversification Opportunities for Electrovaya Common and Virco Manufacturing
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Electrovaya and Virco is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Electrovaya Common Shares and Virco Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virco Manufacturing and Electrovaya Common 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 Electrovaya Common Shares are associated (or correlated) with Virco Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virco Manufacturing has no effect on the direction of Electrovaya Common i.e., Electrovaya Common and Virco Manufacturing go up and down completely randomly.
Pair Corralation between Electrovaya Common and Virco Manufacturing
Given the investment horizon of 90 days Electrovaya Common Shares is expected to under-perform the Virco Manufacturing. But the stock apears to be less risky and, when comparing its historical volatility, Electrovaya Common Shares is 1.13 times less risky than Virco Manufacturing. The stock trades about -0.02 of its potential returns per unit of risk. The Virco Manufacturing is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 424.00 in Virco Manufacturing on August 26, 2024 and sell it today you would earn a total of 1,159 from holding Virco Manufacturing or generate 273.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrovaya Common Shares vs. Virco Manufacturing
Performance |
| Timeline |
| Electrovaya Common Shares |
| Virco Manufacturing |
Electrovaya Common and Virco Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrovaya Common and Virco Manufacturing
The main advantage of trading using opposite Electrovaya Common and Virco Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrovaya Common position performs unexpectedly, Virco Manufacturing 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 Virco Manufacturing will offset losses from the drop in Virco Manufacturing's long position.| Electrovaya Common vs. Bloom Energy Corp | Electrovaya Common vs. Eos Energy Enterprises | Electrovaya Common vs. Sunrise New Energy | Electrovaya Common vs. Flux Power Holdings |
| Virco Manufacturing vs. Bassett Furniture Industries | Virco Manufacturing vs. Hooker Furniture | Virco Manufacturing vs. Natuzzi SpA | Virco Manufacturing vs. Flexsteel Industries |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |