Correlation Between VivoPower International and Intermediate-term
Can any of the company-specific risk be diversified away by investing in both VivoPower International and Intermediate-term 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 Intermediate-term 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 Intermediate Term Bond Fund, you can compare the effects of market volatilities on VivoPower International and Intermediate-term 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 Intermediate-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of VivoPower International and Intermediate-term.
Diversification Opportunities for VivoPower International and Intermediate-term
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VivoPower and Intermediate-term is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Intermediate Term Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Term Bond 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 Intermediate-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Term Bond has no effect on the direction of VivoPower International i.e., VivoPower International and Intermediate-term go up and down completely randomly.
Pair Corralation between VivoPower International and Intermediate-term
Given the investment horizon of 90 days VivoPower International PLC is expected to generate 51.77 times more return on investment than Intermediate-term. However, VivoPower International is 51.77 times more volatile than Intermediate Term Bond Fund. It trades about 0.14 of its potential returns per unit of risk. Intermediate Term Bond Fund is currently generating about 0.06 per unit of risk. If you would invest 84.00 in VivoPower International PLC on August 29, 2024 and sell it today you would earn a total of 28.00 from holding VivoPower International PLC or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VivoPower International PLC vs. Intermediate Term Bond Fund
Performance |
| Timeline |
| VivoPower International |
| Intermediate Term Bond |
VivoPower International and Intermediate-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VivoPower International and Intermediate-term
The main advantage of trading using opposite VivoPower International and Intermediate-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VivoPower International position performs unexpectedly, Intermediate-term 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 Intermediate-term will offset losses from the drop in Intermediate-term's long position.| VivoPower International vs. Emeren Group | VivoPower International vs. Tigo Energy | VivoPower International vs. Sunrun Inc | VivoPower International vs. Sunnova Energy International |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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