Correlation Between VIP Clothing and AGI Greenpac

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Can any of the company-specific risk be diversified away by investing in both VIP Clothing and AGI Greenpac 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 VIP Clothing and AGI Greenpac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIP Clothing Limited and AGI Greenpac Limited, you can compare the effects of market volatilities on VIP Clothing and AGI Greenpac 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 VIP Clothing with a short position of AGI Greenpac. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIP Clothing and AGI Greenpac.

Diversification Opportunities for VIP Clothing and AGI Greenpac

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between VIP and AGI is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding VIP Clothing Limited and AGI Greenpac Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGI Greenpac Limited and VIP Clothing 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 VIP Clothing Limited are associated (or correlated) with AGI Greenpac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGI Greenpac Limited has no effect on the direction of VIP Clothing i.e., VIP Clothing and AGI Greenpac go up and down completely randomly.

Pair Corralation between VIP Clothing and AGI Greenpac

Assuming the 90 days trading horizon VIP Clothing Limited is expected to generate 0.8 times more return on investment than AGI Greenpac. However, VIP Clothing Limited is 1.25 times less risky than AGI Greenpac. It trades about -0.11 of its potential returns per unit of risk. AGI Greenpac Limited is currently generating about -0.15 per unit of risk. If you would invest  4,767  in VIP Clothing Limited on October 10, 2024 and sell it today you would lose (367.00) from holding VIP Clothing Limited or give up 7.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

VIP Clothing Limited  vs.  AGI Greenpac Limited

 Performance 
       Timeline  
VIP Clothing Limited 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in VIP Clothing Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, VIP Clothing is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
AGI Greenpac Limited 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in AGI Greenpac Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, AGI Greenpac exhibited solid returns over the last few months and may actually be approaching a breakup point.

VIP Clothing and AGI Greenpac Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with VIP Clothing and AGI Greenpac

The main advantage of trading using opposite VIP Clothing and AGI Greenpac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIP Clothing position performs unexpectedly, AGI Greenpac 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 AGI Greenpac will offset losses from the drop in AGI Greenpac's long position.
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The idea behind VIP Clothing Limited and AGI Greenpac Limited 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.
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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