Correlation Between VSE and New Horizon
Can any of the company-specific risk be diversified away by investing in both VSE and New Horizon 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 New Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VSE Corporation and New Horizon Aircraft, you can compare the effects of market volatilities on VSE and New Horizon 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 New Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of VSE and New Horizon.
Diversification Opportunities for VSE and New Horizon
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VSE and New is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding VSE Corp. and New Horizon Aircraft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Horizon Aircraft 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 New Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Horizon Aircraft has no effect on the direction of VSE i.e., VSE and New Horizon go up and down completely randomly.
Pair Corralation between VSE and New Horizon
Given the investment horizon of 90 days VSE is expected to generate 3.26 times less return on investment than New Horizon. But when comparing it to its historical volatility, VSE Corporation is 4.38 times less risky than New Horizon. It trades about 0.1 of its potential returns per unit of risk. New Horizon Aircraft is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 53.00 in New Horizon Aircraft on November 3, 2024 and sell it today you would earn a total of 13.80 from holding New Horizon Aircraft or generate 26.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VSE Corp. vs. New Horizon Aircraft
Performance |
| Timeline |
| VSE Corporation |
| New Horizon Aircraft |
VSE and New Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VSE and New Horizon
The main advantage of trading using opposite VSE and New Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VSE position performs unexpectedly, New Horizon 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 Horizon will offset losses from the drop in New Horizon's long position.| VSE vs. Park Electrochemical | VSE vs. Innovative Solutions and | VSE vs. Curtiss Wright | VSE vs. National Presto Industries |
| New Horizon vs. Willamette Valley Vineyards | New Horizon vs. Fernhill Beverage | New Horizon vs. Keurig Dr Pepper | New Horizon vs. The Coca Cola |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |