Correlation Between VGI Public and Sky ICT
Can any of the company-specific risk be diversified away by investing in both VGI Public and Sky ICT 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 VGI Public and Sky ICT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VGI Public and Sky ICT Public, you can compare the effects of market volatilities on VGI Public and Sky ICT 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 VGI Public with a short position of Sky ICT. Check out your portfolio center. Please also check ongoing floating volatility patterns of VGI Public and Sky ICT.
Diversification Opportunities for VGI Public and Sky ICT
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VGI and Sky is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding VGI Public and Sky ICT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sky ICT Public and VGI Public 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 VGI Public are associated (or correlated) with Sky ICT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sky ICT Public has no effect on the direction of VGI Public i.e., VGI Public and Sky ICT go up and down completely randomly.
Pair Corralation between VGI Public and Sky ICT
Assuming the 90 days trading horizon VGI Public is expected to generate 1.41 times more return on investment than Sky ICT. However, VGI Public is 1.41 times more volatile than Sky ICT Public. It trades about 0.08 of its potential returns per unit of risk. Sky ICT Public is currently generating about 0.06 per unit of risk. If you would invest 286.00 in VGI Public on September 3, 2024 and sell it today you would lose (8.00) from holding VGI Public or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.58% |
| Values | Daily Returns |
VGI Public vs. Sky ICT Public
Performance |
| Timeline |
| VGI Public |
| Sky ICT Public |
VGI Public and Sky ICT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VGI Public and Sky ICT
The main advantage of trading using opposite VGI Public and Sky ICT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VGI Public position performs unexpectedly, Sky ICT 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 Sky ICT will offset losses from the drop in Sky ICT's long position.| VGI Public vs. Delta Electronics Public | VGI Public vs. Delta Electronics Public | VGI Public vs. Airports of Thailand | VGI Public vs. Airports of Thailand |
| Sky ICT vs. Forth Public | Sky ICT vs. Delta Electronics Public | Sky ICT vs. MFEC PCL | Sky ICT vs. Hana Microelectronics Public |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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