Correlation Between Vela International and Vela Income
Can any of the company-specific risk be diversified away by investing in both Vela International and Vela Income 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 Vela International and Vela Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vela International and Vela Income Opportunities, you can compare the effects of market volatilities on Vela International and Vela Income 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 Vela International with a short position of Vela Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vela International and Vela Income.
Diversification Opportunities for Vela International and Vela Income
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vela and Vela is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Vela International and Vela Income Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vela Income Opportunities and Vela 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 Vela International are associated (or correlated) with Vela Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vela Income Opportunities has no effect on the direction of Vela International i.e., Vela International and Vela Income go up and down completely randomly.
Pair Corralation between Vela International and Vela Income
Assuming the 90 days horizon Vela International is expected to generate 1.46 times less return on investment than Vela Income. In addition to that, Vela International is 1.41 times more volatile than Vela Income Opportunities. It trades about 0.04 of its total potential returns per unit of risk. Vela Income Opportunities is currently generating about 0.09 per unit of volatility. If you would invest 846.00 in Vela Income Opportunities on August 31, 2024 and sell it today you would earn a total of 149.00 from holding Vela Income Opportunities or generate 17.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vela International vs. Vela Income Opportunities
Performance |
| Timeline |
| Vela International |
| Vela Income Opportunities |
Vela International and Vela Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vela International and Vela Income
The main advantage of trading using opposite Vela International and Vela Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vela International position performs unexpectedly, Vela Income 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 Vela Income will offset losses from the drop in Vela Income's long position.| Vela International vs. Allianzgi Convertible Income | Vela International vs. Fidelity Sai Convertible | Vela International vs. Harbor Vertible Securities | Vela International vs. Advent Claymore Convertible |
| Vela Income vs. Global Technology Portfolio | Vela Income vs. Icon Information Technology | Vela Income vs. Hennessy Technology Fund | Vela Income vs. Science Technology Fund |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |