Correlation Between Vercom SA and E Xim
Can any of the company-specific risk be diversified away by investing in both Vercom SA and E Xim 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 Vercom SA and E Xim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vercom SA and E Xim IT, you can compare the effects of market volatilities on Vercom SA and E Xim 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 Vercom SA with a short position of E Xim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vercom SA and E Xim.
Diversification Opportunities for Vercom SA and E Xim
Good diversification
The 3 months correlation between Vercom and EXM is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Vercom SA and E Xim IT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Xim IT and Vercom SA 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 Vercom SA are associated (or correlated) with E Xim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Xim IT has no effect on the direction of Vercom SA i.e., Vercom SA and E Xim go up and down completely randomly.
Pair Corralation between Vercom SA and E Xim
Assuming the 90 days trading horizon Vercom SA is expected to under-perform the E Xim. But the stock apears to be less risky and, when comparing its historical volatility, Vercom SA is 2.14 times less risky than E Xim. The stock trades about -0.12 of its potential returns per unit of risk. The E Xim IT is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest 14,000 in E Xim IT on August 30, 2024 and sell it today you would earn a total of 2,500 from holding E Xim IT or generate 17.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Vercom SA vs. E Xim IT
Performance |
| Timeline |
| Vercom SA |
| E Xim IT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Vercom SA and E Xim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vercom SA and E Xim
The main advantage of trading using opposite Vercom SA and E Xim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vercom SA position performs unexpectedly, E Xim 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 E Xim will offset losses from the drop in E Xim's long position.| Vercom SA vs. Banco Santander SA | Vercom SA vs. UniCredit SpA | Vercom SA vs. CEZ as | Vercom SA vs. Polski Koncern Naftowy |
| E Xim vs. Varsav Game Studios | E Xim vs. Gamedust SA | E Xim vs. Ultimate Games SA | E Xim vs. Inter Cars SA |
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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