Correlation Between VIMAB Group and Vitec Software
Can any of the company-specific risk be diversified away by investing in both VIMAB Group and Vitec Software 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 VIMAB Group and Vitec Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIMAB Group AB and Vitec Software Group, you can compare the effects of market volatilities on VIMAB Group and Vitec Software 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 VIMAB Group with a short position of Vitec Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIMAB Group and Vitec Software.
Diversification Opportunities for VIMAB Group and Vitec Software
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VIMAB and Vitec is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding VIMAB Group AB and Vitec Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitec Software Group and VIMAB Group 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 VIMAB Group AB are associated (or correlated) with Vitec Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitec Software Group has no effect on the direction of VIMAB Group i.e., VIMAB Group and Vitec Software go up and down completely randomly.
Pair Corralation between VIMAB Group and Vitec Software
Assuming the 90 days trading horizon VIMAB Group AB is expected to generate 5.27 times more return on investment than Vitec Software. However, VIMAB Group is 5.27 times more volatile than Vitec Software Group. It trades about 0.03 of its potential returns per unit of risk. Vitec Software Group is currently generating about -0.03 per unit of risk. If you would invest 930.00 in VIMAB Group AB on August 30, 2024 and sell it today you would lose (140.00) from holding VIMAB Group AB or give up 15.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIMAB Group AB vs. Vitec Software Group
Performance |
| Timeline |
| VIMAB Group AB |
| Vitec Software Group |
VIMAB Group and Vitec Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIMAB Group and Vitec Software
The main advantage of trading using opposite VIMAB Group and Vitec Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIMAB Group position performs unexpectedly, Vitec Software 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 Vitec Software will offset losses from the drop in Vitec Software's long position.| VIMAB Group vs. Vitec Software Group | VIMAB Group vs. Invisio Communications AB | VIMAB Group vs. Qleanair Holding AB | VIMAB Group vs. Upsales Technology AB |
| Vitec Software vs. Lifco AB | Vitec Software vs. Lagercrantz Group AB | Vitec Software vs. Addtech AB | Vitec Software vs. Instalco Intressenter AB |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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