Correlation Between Vicor and Ensurge Micropower
Can any of the company-specific risk be diversified away by investing in both Vicor and Ensurge Micropower 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 Vicor and Ensurge Micropower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vicor and Ensurge Micropower ASA, you can compare the effects of market volatilities on Vicor and Ensurge Micropower 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 Vicor with a short position of Ensurge Micropower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vicor and Ensurge Micropower.
Diversification Opportunities for Vicor and Ensurge Micropower
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vicor and Ensurge is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vicor and Ensurge Micropower ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensurge Micropower ASA and Vicor 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 Vicor are associated (or correlated) with Ensurge Micropower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensurge Micropower ASA has no effect on the direction of Vicor i.e., Vicor and Ensurge Micropower go up and down completely randomly.
Pair Corralation between Vicor and Ensurge Micropower
Given the investment horizon of 90 days Vicor is expected to under-perform the Ensurge Micropower. But the stock apears to be less risky and, when comparing its historical volatility, Vicor is 9.33 times less risky than Ensurge Micropower. The stock trades about 0.0 of its potential returns per unit of risk. The Ensurge Micropower ASA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Ensurge Micropower ASA on September 12, 2024 and sell it today you would lose (20.00) from holding Ensurge Micropower ASA or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 70.69% |
| Values | Daily Returns |
Vicor vs. Ensurge Micropower ASA
Performance |
| Timeline |
| Vicor |
| Ensurge Micropower ASA |
Vicor and Ensurge Micropower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vicor and Ensurge Micropower
The main advantage of trading using opposite Vicor and Ensurge Micropower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vicor position performs unexpectedly, Ensurge Micropower 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 Ensurge Micropower will offset losses from the drop in Ensurge Micropower's long position.The idea behind Vicor and Ensurge Micropower ASA 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.| Ensurge Micropower vs. Ouster Inc | Ensurge Micropower vs. Kopin | Ensurge Micropower vs. Vicor | Ensurge Micropower vs. Fabrinet |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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