Correlation Between VGI Public and Major Cineplex
Can any of the company-specific risk be diversified away by investing in both VGI Public and Major Cineplex 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 Major Cineplex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VGI Public and Major Cineplex Group, you can compare the effects of market volatilities on VGI Public and Major Cineplex 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 Major Cineplex. Check out your portfolio center. Please also check ongoing floating volatility patterns of VGI Public and Major Cineplex.
Diversification Opportunities for VGI Public and Major Cineplex
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VGI and Major is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding VGI Public and Major Cineplex Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Cineplex Group 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 Major Cineplex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Cineplex Group has no effect on the direction of VGI Public i.e., VGI Public and Major Cineplex go up and down completely randomly.
Pair Corralation between VGI Public and Major Cineplex
Assuming the 90 days trading horizon VGI Public is expected to generate 32.44 times more return on investment than Major Cineplex. However, VGI Public is 32.44 times more volatile than Major Cineplex Group. It trades about 0.05 of its potential returns per unit of risk. Major Cineplex Group is currently generating about 0.01 per unit of risk. If you would invest 300.00 in VGI Public on August 28, 2024 and sell it today you would lose (40.00) from holding VGI Public or give up 13.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
VGI Public vs. Major Cineplex Group
Performance |
| Timeline |
| VGI Public |
| Major Cineplex Group |
VGI Public and Major Cineplex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VGI Public and Major Cineplex
The main advantage of trading using opposite VGI Public and Major Cineplex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VGI Public position performs unexpectedly, Major Cineplex 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 Major Cineplex will offset losses from the drop in Major Cineplex's long position.| VGI Public vs. Indara Insurance Public | VGI Public vs. Regional Container Lines | VGI Public vs. Regional Container Lines | VGI Public vs. Mahachai Hospital Public |
| Major Cineplex vs. Indara Insurance Public | Major Cineplex vs. Regional Container Lines | Major Cineplex vs. Regional Container Lines | Major Cineplex vs. Mahachai Hospital 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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