Correlation Between Vista Outdoor and Stingray
Can any of the company-specific risk be diversified away by investing in both Vista Outdoor and Stingray 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 Vista Outdoor and Stingray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Outdoor and Stingray Group, you can compare the effects of market volatilities on Vista Outdoor and Stingray 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 Vista Outdoor with a short position of Stingray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Outdoor and Stingray.
Diversification Opportunities for Vista Outdoor and Stingray
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vista and Stingray is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Vista Outdoor and Stingray Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stingray Group and Vista Outdoor 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 Vista Outdoor are associated (or correlated) with Stingray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stingray Group has no effect on the direction of Vista Outdoor i.e., Vista Outdoor and Stingray go up and down completely randomly.
Pair Corralation between Vista Outdoor and Stingray
Given the investment horizon of 90 days Vista Outdoor is expected to generate 6.4 times less return on investment than Stingray. But when comparing it to its historical volatility, Vista Outdoor is 12.74 times less risky than Stingray. It trades about 0.27 of its potential returns per unit of risk. Stingray Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 532.00 in Stingray Group on August 27, 2024 and sell it today you would earn a total of 37.00 from holding Stingray Group or generate 6.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vista Outdoor vs. Stingray Group
Performance |
| Timeline |
| Vista Outdoor |
| Stingray Group |
Vista Outdoor and Stingray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Outdoor and Stingray
The main advantage of trading using opposite Vista Outdoor and Stingray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Outdoor position performs unexpectedly, Stingray 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 Stingray will offset losses from the drop in Stingray's long position.| Vista Outdoor vs. MCBC Holdings | Vista Outdoor vs. Winnebago Industries | Vista Outdoor vs. LCI Industries | Vista Outdoor vs. Thor Industries |
| Stingray vs. Ironveld Plc | Stingray vs. ArcelorMittal SA ADR | Stingray vs. PennantPark Floating Rate | Stingray vs. CECO Environmental Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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