Correlation Between Vaporbrands Intl and Imperial Brands
Can any of the company-specific risk be diversified away by investing in both Vaporbrands Intl and Imperial Brands 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 Vaporbrands Intl and Imperial Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vaporbrands Intl and Imperial Brands PLC, you can compare the effects of market volatilities on Vaporbrands Intl and Imperial Brands 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 Vaporbrands Intl with a short position of Imperial Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaporbrands Intl and Imperial Brands.
Diversification Opportunities for Vaporbrands Intl and Imperial Brands
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vaporbrands and Imperial is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Vaporbrands Intl and Imperial Brands PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Brands PLC and Vaporbrands Intl 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 Vaporbrands Intl are associated (or correlated) with Imperial Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Brands PLC has no effect on the direction of Vaporbrands Intl i.e., Vaporbrands Intl and Imperial Brands go up and down completely randomly.
Pair Corralation between Vaporbrands Intl and Imperial Brands
Given the investment horizon of 90 days Vaporbrands Intl is expected to generate 5.49 times more return on investment than Imperial Brands. However, Vaporbrands Intl is 5.49 times more volatile than Imperial Brands PLC. It trades about 0.13 of its potential returns per unit of risk. Imperial Brands PLC is currently generating about 0.43 per unit of risk. If you would invest 0.56 in Vaporbrands Intl on September 1, 2024 and sell it today you would earn a total of 0.08 from holding Vaporbrands Intl or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vaporbrands Intl vs. Imperial Brands PLC
Performance |
| Timeline |
| Vaporbrands Intl |
| Imperial Brands PLC |
Vaporbrands Intl and Imperial Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vaporbrands Intl and Imperial Brands
The main advantage of trading using opposite Vaporbrands Intl and Imperial Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vaporbrands Intl position performs unexpectedly, Imperial Brands 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 Imperial Brands will offset losses from the drop in Imperial Brands' long position.| Vaporbrands Intl vs. Faraday Future Intelligent | Vaporbrands Intl vs. China Xuefeng Environmental | Vaporbrands Intl vs. Aston Martin Lagonda | Vaporbrands Intl vs. Volkswagen AG VZO |
| Imperial Brands vs. Signet International Holdings | Imperial Brands vs. National Beverage Corp | Imperial Brands vs. PT Astra International | Imperial Brands vs. Vita Coco |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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