Correlation Between VivoPower International and VEEA
Can any of the company-specific risk be diversified away by investing in both VivoPower International and VEEA 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 VEEA 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 VEEA, you can compare the effects of market volatilities on VivoPower International and VEEA 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 VEEA. Check out your portfolio center. Please also check ongoing floating volatility patterns of VivoPower International and VEEA.
Diversification Opportunities for VivoPower International and VEEA
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between VivoPower and VEEA is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and VEEA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VEEA 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 VEEA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VEEA has no effect on the direction of VivoPower International i.e., VivoPower International and VEEA go up and down completely randomly.
Pair Corralation between VivoPower International and VEEA
Given the investment horizon of 90 days VivoPower International PLC is expected to generate 0.57 times more return on investment than VEEA. However, VivoPower International PLC is 1.74 times less risky than VEEA. It trades about -0.03 of its potential returns per unit of risk. VEEA is currently generating about -0.06 per unit of risk. If you would invest 316.00 in VivoPower International PLC on August 25, 2024 and sell it today you would lose (224.00) from holding VivoPower International PLC or give up 70.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 41.73% |
| Values | Daily Returns |
VivoPower International PLC vs. VEEA
Performance |
| Timeline |
| VivoPower International |
| VEEA |
VivoPower International and VEEA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VivoPower International and VEEA
The main advantage of trading using opposite VivoPower International and VEEA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VivoPower International position performs unexpectedly, VEEA 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 VEEA will offset losses from the drop in VEEA's long position.| VivoPower International vs. Emeren Group | VivoPower International vs. Tigo Energy | VivoPower International vs. Sunrun Inc | VivoPower International vs. Sunnova Energy International |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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