Correlation Between Main Street and Vopia
Can any of the company-specific risk be diversified away by investing in both Main Street and Vopia 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 Main Street and Vopia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main Street Capital and Vopia Inc, you can compare the effects of market volatilities on Main Street and Vopia 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 Main Street with a short position of Vopia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main Street and Vopia.
Diversification Opportunities for Main Street and Vopia
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Main and Vopia is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Main Street Capital and Vopia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vopia Inc and Main Street 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 Main Street Capital are associated (or correlated) with Vopia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vopia Inc has no effect on the direction of Main Street i.e., Main Street and Vopia go up and down completely randomly.
Pair Corralation between Main Street and Vopia
Given the investment horizon of 90 days Main Street is expected to generate 11.67 times less return on investment than Vopia. But when comparing it to its historical volatility, Main Street Capital is 16.23 times less risky than Vopia. It trades about 0.08 of its potential returns per unit of risk. Vopia Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.05 in Vopia Inc on January 8, 2025 and sell it today you would lose (0.04) from holding Vopia Inc or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.36% |
| Values | Daily Returns |
Main Street Capital vs. Vopia Inc
Performance |
| Timeline |
| Main Street Capital |
| Vopia Inc |
Main Street and Vopia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main Street and Vopia
The main advantage of trading using opposite Main Street and Vopia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main Street position performs unexpectedly, Vopia 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 Vopia will offset losses from the drop in Vopia's long position.| Main Street vs. Gladstone Capital | Main Street vs. PennantPark Floating Rate | Main Street vs. Horizon Technology Finance | Main Street vs. Prospect Capital |
| Vopia vs. ASSA ABLOY AB | Vopia vs. Bridger Aerospace Group | Vopia vs. Ameriguard Security Services | Vopia vs. Global Digital Soltn |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |