Correlation Between VCI Global and Aeries Technology
Can any of the company-specific risk be diversified away by investing in both VCI Global and Aeries Technology 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 VCI Global and Aeries Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VCI Global Limited and Aeries Technology, you can compare the effects of market volatilities on VCI Global and Aeries Technology 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 VCI Global with a short position of Aeries Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of VCI Global and Aeries Technology.
Diversification Opportunities for VCI Global and Aeries Technology
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VCI and Aeries is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding VCI Global Limited and Aeries Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeries Technology and VCI Global 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 VCI Global Limited are associated (or correlated) with Aeries Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeries Technology has no effect on the direction of VCI Global i.e., VCI Global and Aeries Technology go up and down completely randomly.
Pair Corralation between VCI Global and Aeries Technology
Given the investment horizon of 90 days VCI Global Limited is expected to under-perform the Aeries Technology. In addition to that, VCI Global is 2.43 times more volatile than Aeries Technology. It trades about -0.06 of its total potential returns per unit of risk. Aeries Technology is currently generating about -0.03 per unit of volatility. If you would invest 140.00 in Aeries Technology on August 29, 2024 and sell it today you would lose (50.00) from holding Aeries Technology or give up 35.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VCI Global Limited vs. Aeries Technology
Performance |
| Timeline |
| VCI Global Limited |
| Aeries Technology |
VCI Global and Aeries Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VCI Global and Aeries Technology
The main advantage of trading using opposite VCI Global and Aeries Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VCI Global position performs unexpectedly, Aeries Technology 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 Aeries Technology will offset losses from the drop in Aeries Technology's long position.| VCI Global vs. CRA International | VCI Global vs. ICF International | VCI Global vs. Forrester Research | VCI Global vs. Huron Consulting Group |
| Aeries Technology vs. Sun Country Airlines | Aeries Technology vs. Skechers USA | Aeries Technology vs. Tower One Wireless | Aeries Technology vs. Bausch Lomb Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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