Correlation Between Marine Products and Vast Renewables
Can any of the company-specific risk be diversified away by investing in both Marine Products and Vast Renewables 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 Marine Products and Vast Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marine Products and Vast Renewables Limited, you can compare the effects of market volatilities on Marine Products and Vast Renewables 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 Marine Products with a short position of Vast Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and Vast Renewables.
Diversification Opportunities for Marine Products and Vast Renewables
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marine and Vast is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and Vast Renewables Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vast Renewables and Marine Products 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 Marine Products are associated (or correlated) with Vast Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vast Renewables has no effect on the direction of Marine Products i.e., Marine Products and Vast Renewables go up and down completely randomly.
Pair Corralation between Marine Products and Vast Renewables
Considering the 90-day investment horizon Marine Products is expected to generate 16.59 times less return on investment than Vast Renewables. But when comparing it to its historical volatility, Marine Products is 14.26 times less risky than Vast Renewables. It trades about 0.1 of its potential returns per unit of risk. Vast Renewables Limited is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6.48 in Vast Renewables Limited on September 4, 2024 and sell it today you would earn a total of 1.74 from holding Vast Renewables Limited or generate 26.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.63% |
| Values | Daily Returns |
Marine Products vs. Vast Renewables Limited
Performance |
| Timeline |
| Marine Products |
| Vast Renewables |
Marine Products and Vast Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marine Products and Vast Renewables
The main advantage of trading using opposite Marine Products and Vast Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products position performs unexpectedly, Vast Renewables 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 Vast Renewables will offset losses from the drop in Vast Renewables' long position.| Marine Products vs. Thor Industries | Marine Products vs. BRP Inc | Marine Products vs. EZGO Technologies | Marine Products vs. Polaris Industries |
| Vast Renewables vs. HUTCHMED DRC | Vast Renewables vs. American Axle Manufacturing | Vast Renewables vs. Marine Products | Vast Renewables vs. PACCAR Inc |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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