Correlation Between VGI Public and Home Product
Can any of the company-specific risk be diversified away by investing in both VGI Public and Home Product 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 Home Product into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VGI Public and Home Product Center, you can compare the effects of market volatilities on VGI Public and Home Product 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 Home Product. Check out your portfolio center. Please also check ongoing floating volatility patterns of VGI Public and Home Product.
Diversification Opportunities for VGI Public and Home Product
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VGI and Home is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding VGI Public and Home Product Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Product Center 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 Home Product. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Product Center has no effect on the direction of VGI Public i.e., VGI Public and Home Product go up and down completely randomly.
Pair Corralation between VGI Public and Home Product
Assuming the 90 days trading horizon VGI Public is expected to under-perform the Home Product. In addition to that, VGI Public is 2.46 times more volatile than Home Product Center. It trades about -0.01 of its total potential returns per unit of risk. Home Product Center is currently generating about 0.08 per unit of volatility. If you would invest 955.00 in Home Product Center on August 26, 2024 and sell it today you would earn a total of 25.00 from holding Home Product Center or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VGI Public vs. Home Product Center
Performance |
| Timeline |
| VGI Public |
| Home Product Center |
VGI Public and Home Product Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VGI Public and Home Product
The main advantage of trading using opposite VGI Public and Home Product positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VGI Public position performs unexpectedly, Home Product 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 Home Product will offset losses from the drop in Home Product's long position.| VGI Public vs. BTS Group Holdings | VGI Public vs. WHA Public | VGI Public vs. Plan B Media | VGI Public vs. Gulf Energy Development |
| Home Product vs. SCB X Public | Home Product vs. Kasikornbank Public | Home Product vs. PTT Public | Home Product vs. Kasikornbank 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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