Correlation Between Vee SA and VR Factory
Can any of the company-specific risk be diversified away by investing in both Vee SA and VR Factory 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 Vee SA and VR Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vee SA and VR Factory Games, you can compare the effects of market volatilities on Vee SA and VR Factory 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 Vee SA with a short position of VR Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vee SA and VR Factory.
Diversification Opportunities for Vee SA and VR Factory
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vee and VRF is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Vee SA and VR Factory Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VR Factory Games and Vee SA 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 Vee SA are associated (or correlated) with VR Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VR Factory Games has no effect on the direction of Vee SA i.e., Vee SA and VR Factory go up and down completely randomly.
Pair Corralation between Vee SA and VR Factory
Assuming the 90 days trading horizon Vee SA is expected to generate 0.41 times more return on investment than VR Factory. However, Vee SA is 2.44 times less risky than VR Factory. It trades about -0.14 of its potential returns per unit of risk. VR Factory Games is currently generating about -0.06 per unit of risk. If you would invest 1,536 in Vee SA on August 30, 2024 and sell it today you would lose (120.00) from holding Vee SA or give up 7.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vee SA vs. VR Factory Games
Performance |
| Timeline |
| Vee SA |
| VR Factory Games |
Vee SA and VR Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vee SA and VR Factory
The main advantage of trading using opposite Vee SA and VR Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vee SA position performs unexpectedly, VR Factory 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 VR Factory will offset losses from the drop in VR Factory's long position.The idea behind Vee SA and VR Factory Games 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.| VR Factory vs. NGG | VR Factory vs. Asseco Business Solutions | VR Factory vs. Detalion Games SA | VR Factory vs. CFI Holding SA |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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