Correlation Between VF and Immobile
Can any of the company-specific risk be diversified away by investing in both VF and Immobile 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 VF and Immobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VF Corporation and Immobile, you can compare the effects of market volatilities on VF and Immobile 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 VF with a short position of Immobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of VF and Immobile.
Diversification Opportunities for VF and Immobile
Average diversification
The 3 months correlation between VF and Immobile is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding VF Corp. and Immobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immobile and VF 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 VF Corporation are associated (or correlated) with Immobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immobile has no effect on the direction of VF i.e., VF and Immobile go up and down completely randomly.
Pair Corralation between VF and Immobile
Considering the 90-day investment horizon VF is expected to generate 1.75 times less return on investment than Immobile. In addition to that, VF is 1.15 times more volatile than Immobile. It trades about 0.01 of its total potential returns per unit of risk. Immobile is currently generating about 0.02 per unit of volatility. If you would invest 206.00 in Immobile on December 12, 2024 and sell it today you would earn a total of 28.00 from holding Immobile or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
VF Corp. vs. Immobile
Performance |
| Timeline |
| VF Corporation |
| Immobile |
VF and Immobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VF and Immobile
The main advantage of trading using opposite VF and Immobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VF position performs unexpectedly, Immobile 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 Immobile will offset losses from the drop in Immobile's long position.The idea behind VF Corporation and Immobile 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.| Immobile vs. GreenX Metals | ||
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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