Correlation Between PS International and Vita Coco

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Can any of the company-specific risk be diversified away by investing in both PS International and Vita Coco 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 PS International and Vita Coco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PS International Group and Vita Coco, you can compare the effects of market volatilities on PS International and Vita Coco 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 PS International with a short position of Vita Coco. Check out your portfolio center. Please also check ongoing floating volatility patterns of PS International and Vita Coco.

Diversification Opportunities for PS International and Vita Coco

-0.84
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between PSIG and Vita is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding PS International Group and Vita Coco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vita Coco and PS International 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 PS International Group are associated (or correlated) with Vita Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vita Coco has no effect on the direction of PS International i.e., PS International and Vita Coco go up and down completely randomly.

Pair Corralation between PS International and Vita Coco

Given the investment horizon of 90 days PS International Group is expected to under-perform the Vita Coco. In addition to that, PS International is 3.27 times more volatile than Vita Coco. It trades about -0.13 of its total potential returns per unit of risk. Vita Coco is currently generating about 0.1 per unit of volatility. If you would invest  3,526  in Vita Coco on September 12, 2024 and sell it today you would earn a total of  109.00  from holding Vita Coco or generate 3.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

PS International Group  vs.  Vita Coco

 Performance 
       Timeline  
PS International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PS International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Vita Coco 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Vita Coco are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, Vita Coco displayed solid returns over the last few months and may actually be approaching a breakup point.

PS International and Vita Coco Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PS International and Vita Coco

The main advantage of trading using opposite PS International and Vita Coco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PS International position performs unexpectedly, Vita Coco 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 Vita Coco will offset losses from the drop in Vita Coco's long position.
The idea behind PS International Group and Vita Coco 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.
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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