Correlation Between VirTra and Singapore Technologies
Can any of the company-specific risk be diversified away by investing in both VirTra and Singapore Technologies 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 VirTra and Singapore Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VirTra Inc and Singapore Technologies Engineering, you can compare the effects of market volatilities on VirTra and Singapore Technologies 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 VirTra with a short position of Singapore Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of VirTra and Singapore Technologies.
Diversification Opportunities for VirTra and Singapore Technologies
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between VirTra and Singapore is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding VirTra Inc and Singapore Technologies Enginee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Technologies and VirTra 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 VirTra Inc are associated (or correlated) with Singapore Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Technologies has no effect on the direction of VirTra i.e., VirTra and Singapore Technologies go up and down completely randomly.
Pair Corralation between VirTra and Singapore Technologies
Given the investment horizon of 90 days VirTra Inc is expected to generate 2.2 times more return on investment than Singapore Technologies. However, VirTra is 2.2 times more volatile than Singapore Technologies Engineering. It trades about 0.17 of its potential returns per unit of risk. Singapore Technologies Engineering is currently generating about 0.16 per unit of risk. If you would invest 642.00 in VirTra Inc on October 21, 2024 and sell it today you would earn a total of 41.00 from holding VirTra Inc or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VirTra Inc vs. Singapore Technologies Enginee
Performance |
| Timeline |
| VirTra Inc |
| Singapore Technologies |
VirTra and Singapore Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VirTra and Singapore Technologies
The main advantage of trading using opposite VirTra and Singapore Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VirTra position performs unexpectedly, Singapore Technologies 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 Singapore Technologies will offset losses from the drop in Singapore Technologies' long position.| VirTra vs. Innovative Solutions and | VirTra vs. Park Electrochemical | VirTra vs. Ducommun Incorporated | VirTra vs. National Presto Industries |
| Singapore Technologies vs. Thales SA | Singapore Technologies vs. MTU Aero Engines | Singapore Technologies vs. Safran SA | Singapore Technologies vs. Airbus Group SE |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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