Correlation Between Vicinity and Fobi AI
Can any of the company-specific risk be diversified away by investing in both Vicinity and Fobi AI 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 Vicinity and Fobi AI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vicinity Motor Corp and Fobi AI, you can compare the effects of market volatilities on Vicinity and Fobi AI 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 Vicinity with a short position of Fobi AI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vicinity and Fobi AI.
Diversification Opportunities for Vicinity and Fobi AI
Very poor diversification
The 3 months correlation between Vicinity and Fobi is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Vicinity Motor Corp and Fobi AI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fobi AI and Vicinity 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 Vicinity Motor Corp are associated (or correlated) with Fobi AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fobi AI has no effect on the direction of Vicinity i.e., Vicinity and Fobi AI go up and down completely randomly.
Pair Corralation between Vicinity and Fobi AI
Considering the 90-day investment horizon Vicinity Motor Corp is expected to under-perform the Fobi AI. In addition to that, Vicinity is 1.82 times more volatile than Fobi AI. It trades about -0.05 of its total potential returns per unit of risk. Fobi AI is currently generating about -0.03 per unit of volatility. If you would invest 26.00 in Fobi AI on September 2, 2024 and sell it today you would lose (22.00) from holding Fobi AI or give up 84.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Vicinity Motor Corp vs. Fobi AI
Performance |
| Timeline |
| Vicinity Motor Corp |
| Fobi AI |
Vicinity and Fobi AI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vicinity and Fobi AI
The main advantage of trading using opposite Vicinity and Fobi AI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vicinity position performs unexpectedly, Fobi AI 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 Fobi AI will offset losses from the drop in Fobi AI's long position.| Vicinity vs. Blue Bird Corp | Vicinity vs. AYRO Inc | Vicinity vs. BAIC Motor | Vicinity vs. Zapp Electric Vehicles |
| Fobi AI vs. Northview Residential REIT | Fobi AI vs. Winshear Gold Corp | Fobi AI vs. Wilmington Capital Management | Fobi AI vs. Till Capital |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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