Correlation Between Virco Manufacturing and Crown Holdings
Can any of the company-specific risk be diversified away by investing in both Virco Manufacturing and Crown Holdings 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 Virco Manufacturing and Crown Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virco Manufacturing and Crown Holdings, you can compare the effects of market volatilities on Virco Manufacturing and Crown Holdings 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 Virco Manufacturing with a short position of Crown Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virco Manufacturing and Crown Holdings.
Diversification Opportunities for Virco Manufacturing and Crown Holdings
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virco and Crown is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Virco Manufacturing and Crown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Holdings and Virco Manufacturing 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 Virco Manufacturing are associated (or correlated) with Crown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Holdings has no effect on the direction of Virco Manufacturing i.e., Virco Manufacturing and Crown Holdings go up and down completely randomly.
Pair Corralation between Virco Manufacturing and Crown Holdings
Given the investment horizon of 90 days Virco Manufacturing is expected to generate 3.52 times more return on investment than Crown Holdings. However, Virco Manufacturing is 3.52 times more volatile than Crown Holdings. It trades about 0.16 of its potential returns per unit of risk. Crown Holdings is currently generating about -0.1 per unit of risk. If you would invest 1,412 in Virco Manufacturing on August 27, 2024 and sell it today you would earn a total of 171.00 from holding Virco Manufacturing or generate 12.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virco Manufacturing vs. Crown Holdings
Performance |
| Timeline |
| Virco Manufacturing |
| Crown Holdings |
Virco Manufacturing and Crown Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virco Manufacturing and Crown Holdings
The main advantage of trading using opposite Virco Manufacturing and Crown Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virco Manufacturing position performs unexpectedly, Crown Holdings 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 Crown Holdings will offset losses from the drop in Crown Holdings' long position.| Virco Manufacturing vs. Bassett Furniture Industries | Virco Manufacturing vs. Hooker Furniture | Virco Manufacturing vs. Natuzzi SpA | Virco Manufacturing vs. Flexsteel Industries |
| Crown Holdings vs. AptarGroup | Crown Holdings vs. Sonoco Products | Crown Holdings vs. Graphic Packaging Holding |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Positions Ratings 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 |