Correlation Between VSE and Exponent
Can any of the company-specific risk be diversified away by investing in both VSE and Exponent 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 VSE and Exponent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VSE Corporation and Exponent, you can compare the effects of market volatilities on VSE and Exponent 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 VSE with a short position of Exponent. Check out your portfolio center. Please also check ongoing floating volatility patterns of VSE and Exponent.
Diversification Opportunities for VSE and Exponent
Excellent diversification
The 3 months correlation between VSE and Exponent is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding VSE Corp. and Exponent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exponent and VSE 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 VSE Corporation are associated (or correlated) with Exponent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exponent has no effect on the direction of VSE i.e., VSE and Exponent go up and down completely randomly.
Pair Corralation between VSE and Exponent
Given the investment horizon of 90 days VSE Corporation is expected to generate 1.27 times more return on investment than Exponent. However, VSE is 1.27 times more volatile than Exponent. It trades about 0.2 of its potential returns per unit of risk. Exponent is currently generating about 0.02 per unit of risk. If you would invest 10,470 in VSE Corporation on August 27, 2024 and sell it today you would earn a total of 1,228 from holding VSE Corporation or generate 11.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VSE Corp. vs. Exponent
Performance |
| Timeline |
| VSE Corporation |
| Exponent |
VSE and Exponent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VSE and Exponent
The main advantage of trading using opposite VSE and Exponent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VSE position performs unexpectedly, Exponent 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 Exponent will offset losses from the drop in Exponent's long position.| VSE vs. Park Electrochemical | VSE vs. Innovative Solutions and | VSE vs. Curtiss Wright | VSE vs. National Presto Industries |
| Exponent vs. Franklin Covey | Exponent vs. TransUnion | Exponent vs. ICF International | Exponent vs. Huron Consulting Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |