Correlation Between VNUE and New Wave
Can any of the company-specific risk be diversified away by investing in both VNUE and New Wave 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 VNUE and New Wave into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VNUE Inc and New Wave Holdings, you can compare the effects of market volatilities on VNUE and New Wave 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 VNUE with a short position of New Wave. Check out your portfolio center. Please also check ongoing floating volatility patterns of VNUE and New Wave.
Diversification Opportunities for VNUE and New Wave
Average diversification
The 3 months correlation between VNUE and New is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding VNUE Inc and New Wave Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Wave Holdings and VNUE 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 VNUE Inc are associated (or correlated) with New Wave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Wave Holdings has no effect on the direction of VNUE i.e., VNUE and New Wave go up and down completely randomly.
Pair Corralation between VNUE and New Wave
Given the investment horizon of 90 days VNUE is expected to generate 1.48 times less return on investment than New Wave. In addition to that, VNUE is 1.11 times more volatile than New Wave Holdings. It trades about 0.04 of its total potential returns per unit of risk. New Wave Holdings is currently generating about 0.06 per unit of volatility. If you would invest 0.88 in New Wave Holdings on September 14, 2024 and sell it today you would lose (0.08) from holding New Wave Holdings or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
VNUE Inc vs. New Wave Holdings
Performance |
| Timeline |
| VNUE Inc |
| New Wave Holdings |
VNUE and New Wave Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VNUE and New Wave
The main advantage of trading using opposite VNUE and New Wave positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VNUE position performs unexpectedly, New Wave 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 New Wave will offset losses from the drop in New Wave's long position.The idea behind VNUE Inc and New Wave Holdings 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.| New Wave vs. ZoomerMedia Limited | New Wave vs. OverActive Media Corp | New Wave vs. Network Media Group | New Wave vs. Celtic plc |
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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