Correlation Between Virco Manufacturing and Gauzy
Can any of the company-specific risk be diversified away by investing in both Virco Manufacturing and Gauzy 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 Gauzy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virco Manufacturing and Gauzy Ltd Ordinary, you can compare the effects of market volatilities on Virco Manufacturing and Gauzy 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 Gauzy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virco Manufacturing and Gauzy.
Diversification Opportunities for Virco Manufacturing and Gauzy
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virco and Gauzy is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Virco Manufacturing and Gauzy Ltd Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gauzy Ordinary 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 Gauzy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gauzy Ordinary has no effect on the direction of Virco Manufacturing i.e., Virco Manufacturing and Gauzy go up and down completely randomly.
Pair Corralation between Virco Manufacturing and Gauzy
Given the investment horizon of 90 days Virco Manufacturing is expected to generate 0.93 times more return on investment than Gauzy. However, Virco Manufacturing is 1.08 times less risky than Gauzy. It trades about 0.22 of its potential returns per unit of risk. Gauzy Ltd Ordinary is currently generating about -0.09 per unit of risk. If you would invest 1,400 in Virco Manufacturing on September 2, 2024 and sell it today you would earn a total of 242.00 from holding Virco Manufacturing or generate 17.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virco Manufacturing vs. Gauzy Ltd Ordinary
Performance |
| Timeline |
| Virco Manufacturing |
| Gauzy Ordinary |
Virco Manufacturing and Gauzy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virco Manufacturing and Gauzy
The main advantage of trading using opposite Virco Manufacturing and Gauzy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virco Manufacturing position performs unexpectedly, Gauzy 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 Gauzy will offset losses from the drop in Gauzy's long position.| Virco Manufacturing vs. Bassett Furniture Industries | Virco Manufacturing vs. Hooker Furniture | Virco Manufacturing vs. Natuzzi SpA | Virco Manufacturing vs. Flexsteel Industries |
| Gauzy vs. Pearson PLC ADR | Gauzy vs. Hudson Pacific Properties | Gauzy vs. Virco Manufacturing | Gauzy vs. Acco Brands |
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.
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