Correlation Between Vela Large and Vela International
Can any of the company-specific risk be diversified away by investing in both Vela Large and Vela International 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 Large and Vela International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vela Large Cap and Vela International, you can compare the effects of market volatilities on Vela Large and Vela International 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 Large with a short position of Vela International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vela Large and Vela International.
Diversification Opportunities for Vela Large and Vela International
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vela and Vela is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Vela Large Cap and Vela International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vela International and Vela Large 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 Large Cap are associated (or correlated) with Vela International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vela International has no effect on the direction of Vela Large i.e., Vela Large and Vela International go up and down completely randomly.
Pair Corralation between Vela Large and Vela International
Assuming the 90 days horizon Vela Large Cap is expected to generate 0.76 times more return on investment than Vela International. However, Vela Large Cap is 1.32 times less risky than Vela International. It trades about 0.13 of its potential returns per unit of risk. Vela International is currently generating about 0.04 per unit of risk. If you would invest 1,400 in Vela Large Cap on August 31, 2024 and sell it today you would earn a total of 415.00 from holding Vela Large Cap or generate 29.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vela Large Cap vs. Vela International
Performance |
| Timeline |
| Vela Large Cap |
| Vela International |
Vela Large and Vela International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vela Large and Vela International
The main advantage of trading using opposite Vela Large and Vela International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vela Large position performs unexpectedly, Vela International 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 International will offset losses from the drop in Vela International's long position.| Vela Large vs. Champlain Mid Cap | Vela Large vs. Kinetics Small Cap | Vela Large vs. Tfa Alphagen Growth | Vela Large vs. Artisan Small Cap |
| Vela International vs. Allianzgi Convertible Income | Vela International vs. Fidelity Sai Convertible | Vela International vs. Harbor Vertible Securities | Vela International vs. Advent Claymore Convertible |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stocks Directory Find actively traded stocks across global markets |