Correlation Between VivoPower International and Red Oak
Can any of the company-specific risk be diversified away by investing in both VivoPower International and Red Oak 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 VivoPower International and Red Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VivoPower International PLC and Red Oak Technology, you can compare the effects of market volatilities on VivoPower International and Red Oak 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 VivoPower International with a short position of Red Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of VivoPower International and Red Oak.
Diversification Opportunities for VivoPower International and Red Oak
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VivoPower and Red is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Red Oak Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Oak Technology and VivoPower International 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 VivoPower International PLC are associated (or correlated) with Red Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Oak Technology has no effect on the direction of VivoPower International i.e., VivoPower International and Red Oak go up and down completely randomly.
Pair Corralation between VivoPower International and Red Oak
Given the investment horizon of 90 days VivoPower International PLC is expected to generate 14.45 times more return on investment than Red Oak. However, VivoPower International is 14.45 times more volatile than Red Oak Technology. It trades about 0.02 of its potential returns per unit of risk. Red Oak Technology is currently generating about 0.1 per unit of risk. If you would invest 797.00 in VivoPower International PLC on August 27, 2024 and sell it today you would lose (705.00) from holding VivoPower International PLC or give up 88.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VivoPower International PLC vs. Red Oak Technology
Performance |
| Timeline |
| VivoPower International |
| Red Oak Technology |
VivoPower International and Red Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VivoPower International and Red Oak
The main advantage of trading using opposite VivoPower International and Red Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VivoPower International position performs unexpectedly, Red Oak 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 Red Oak will offset losses from the drop in Red Oak's long position.| VivoPower International vs. Emeren Group | VivoPower International vs. Tigo Energy | VivoPower International vs. Sunrun Inc | VivoPower International vs. Sunnova Energy International |
| Red Oak vs. White Oak Select | Red Oak vs. Black Oak Emerging | Red Oak vs. Berkshire Focus | Red Oak vs. Janus Global Technology |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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