Correlation Between Vimeo and Aware
Can any of the company-specific risk be diversified away by investing in both Vimeo and Aware 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 Vimeo and Aware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vimeo Inc and Aware Inc, you can compare the effects of market volatilities on Vimeo and Aware 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 Vimeo with a short position of Aware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vimeo and Aware.
Diversification Opportunities for Vimeo and Aware
Excellent diversification
The 3 months correlation between Vimeo and Aware is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Vimeo Inc and Aware Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aware Inc and Vimeo 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 Vimeo Inc are associated (or correlated) with Aware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aware Inc has no effect on the direction of Vimeo i.e., Vimeo and Aware go up and down completely randomly.
Pair Corralation between Vimeo and Aware
Given the investment horizon of 90 days Vimeo Inc is expected to under-perform the Aware. But the stock apears to be less risky and, when comparing its historical volatility, Vimeo Inc is 2.17 times less risky than Aware. The stock trades about -0.04 of its potential returns per unit of risk. The Aware Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 152.00 in Aware Inc on October 20, 2024 and sell it today you would earn a total of 14.00 from holding Aware Inc or generate 9.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Vimeo Inc vs. Aware Inc
Performance |
| Timeline |
| Vimeo Inc |
| Aware Inc |
Vimeo and Aware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vimeo and Aware
The main advantage of trading using opposite Vimeo and Aware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vimeo position performs unexpectedly, Aware 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 Aware will offset losses from the drop in Aware's long position.The idea behind Vimeo Inc and Aware Inc 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.| Aware vs. Xcelmobility | Aware vs. Pushfor Investments | Aware vs. CurrentC Power | Aware vs. Agent Information Software |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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