Correlation Between ALERION CLEANPOWER and Vista Outdoor
Can any of the company-specific risk be diversified away by investing in both ALERION CLEANPOWER and Vista Outdoor 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 ALERION CLEANPOWER and Vista Outdoor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALERION CLEANPOWER and Vista Outdoor, you can compare the effects of market volatilities on ALERION CLEANPOWER and Vista Outdoor 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 ALERION CLEANPOWER with a short position of Vista Outdoor. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALERION CLEANPOWER and Vista Outdoor.
Diversification Opportunities for ALERION CLEANPOWER and Vista Outdoor
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ALERION and Vista is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding ALERION CLEANPOWER and Vista Outdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Outdoor and ALERION CLEANPOWER 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 ALERION CLEANPOWER are associated (or correlated) with Vista Outdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Outdoor has no effect on the direction of ALERION CLEANPOWER i.e., ALERION CLEANPOWER and Vista Outdoor go up and down completely randomly.
Pair Corralation between ALERION CLEANPOWER and Vista Outdoor
Assuming the 90 days trading horizon ALERION CLEANPOWER is expected to under-perform the Vista Outdoor. But the stock apears to be less risky and, when comparing its historical volatility, ALERION CLEANPOWER is 1.34 times less risky than Vista Outdoor. The stock trades about -0.04 of its potential returns per unit of risk. The Vista Outdoor is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,270 in Vista Outdoor on September 23, 2024 and sell it today you would earn a total of 103.00 from holding Vista Outdoor or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.65% |
| Values | Daily Returns |
ALERION CLEANPOWER vs. Vista Outdoor
Performance |
| Timeline |
| ALERION CLEANPOWER |
| Vista Outdoor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ALERION CLEANPOWER and Vista Outdoor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALERION CLEANPOWER and Vista Outdoor
The main advantage of trading using opposite ALERION CLEANPOWER and Vista Outdoor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALERION CLEANPOWER position performs unexpectedly, Vista Outdoor 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 Vista Outdoor will offset losses from the drop in Vista Outdoor's long position.| ALERION CLEANPOWER vs. CN LGYPWRGRUNSPADR10 | ALERION CLEANPOWER vs. Encavis AG | ALERION CLEANPOWER vs. PNE AG | ALERION CLEANPOWER vs. Eaton PLC |
| Vista Outdoor vs. UNIVERSAL MUSIC GROUP | Vista Outdoor vs. ALERION CLEANPOWER | Vista Outdoor vs. SERI INDUSTRIAL EO | Vista Outdoor vs. Cleanaway Waste Management |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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