Correlation Between Vasta Platform and Santech Holdings
Can any of the company-specific risk be diversified away by investing in both Vasta Platform and Santech Holdings 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 Vasta Platform and Santech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vasta Platform and Santech Holdings Limited, you can compare the effects of market volatilities on Vasta Platform and Santech Holdings 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 Vasta Platform with a short position of Santech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vasta Platform and Santech Holdings.
Diversification Opportunities for Vasta Platform and Santech Holdings
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vasta and Santech is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Vasta Platform and Santech Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santech Holdings and Vasta Platform 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 Vasta Platform are associated (or correlated) with Santech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santech Holdings has no effect on the direction of Vasta Platform i.e., Vasta Platform and Santech Holdings go up and down completely randomly.
Pair Corralation between Vasta Platform and Santech Holdings
Given the investment horizon of 90 days Vasta Platform is expected to generate 0.73 times more return on investment than Santech Holdings. However, Vasta Platform is 1.38 times less risky than Santech Holdings. It trades about 0.36 of its potential returns per unit of risk. Santech Holdings Limited is currently generating about -0.27 per unit of risk. If you would invest 238.00 in Vasta Platform on November 8, 2024 and sell it today you would earn a total of 50.00 from holding Vasta Platform or generate 21.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vasta Platform vs. Santech Holdings Limited
Performance |
| Timeline |
| Vasta Platform |
| Santech Holdings |
Vasta Platform and Santech Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vasta Platform and Santech Holdings
The main advantage of trading using opposite Vasta Platform and Santech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vasta Platform position performs unexpectedly, Santech Holdings 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 Santech Holdings will offset losses from the drop in Santech Holdings' long position.| Vasta Platform vs. Strategic Education | Vasta Platform vs. Grand Canyon Education | Vasta Platform vs. Universal Technical Institute | Vasta Platform vs. Laureate Education |
| Santech Holdings vs. Western Asset Investment | Santech Holdings vs. BorgWarner | Santech Holdings vs. FDG Electric Vehicles | Santech Holdings vs. Adient 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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