Correlation Between VCI Global and Stantec
Can any of the company-specific risk be diversified away by investing in both VCI Global and Stantec 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 Stantec 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 Stantec, you can compare the effects of market volatilities on VCI Global and Stantec 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 Stantec. Check out your portfolio center. Please also check ongoing floating volatility patterns of VCI Global and Stantec.
Diversification Opportunities for VCI Global and Stantec
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VCI and Stantec is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding VCI Global Limited and Stantec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stantec 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 Stantec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stantec has no effect on the direction of VCI Global i.e., VCI Global and Stantec go up and down completely randomly.
Pair Corralation between VCI Global and Stantec
Given the investment horizon of 90 days VCI Global Limited is expected to under-perform the Stantec. In addition to that, VCI Global is 10.36 times more volatile than Stantec. It trades about -0.02 of its total potential returns per unit of risk. Stantec is currently generating about 0.08 per unit of volatility. If you would invest 6,142 in Stantec on August 31, 2024 and sell it today you would earn a total of 2,560 from holding Stantec or generate 41.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VCI Global Limited vs. Stantec
Performance |
| Timeline |
| VCI Global Limited |
| Stantec |
VCI Global and Stantec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VCI Global and Stantec
The main advantage of trading using opposite VCI Global and Stantec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VCI Global position performs unexpectedly, Stantec 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 Stantec will offset losses from the drop in Stantec's long position.| VCI Global vs. CRA International | VCI Global vs. ICF International | VCI Global vs. Forrester Research | VCI Global vs. Huron Consulting Group |
| Stantec vs. CRA International | Stantec vs. Huron Consulting Group | Stantec vs. Forrester Research | Stantec vs. Resources Connection |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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