Correlation Between Risuntek and Vicor

Can any of the company-specific risk be diversified away by investing in both Risuntek and Vicor 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 Risuntek and Vicor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Risuntek and Vicor, you can compare the effects of market volatilities on Risuntek and Vicor 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 Risuntek with a short position of Vicor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Risuntek and Vicor.

Diversification Opportunities for Risuntek and Vicor

0.29

Correlation Coefficient

Risuntek  Vicor

Modest diversification

The 3 months correlation between Risuntek and Vicor is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Risuntek and Vicor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicor and Risuntek 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 Risuntek are associated (or correlated) with Vicor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicor has no effect on the direction of Risuntek i.e., Risuntek and Vicor go up and down completely randomly.

Pair Corralation between Risuntek and Vicor

Assuming the 90 days trading horizon Risuntek is expected to under-perform the Vicor. But the stock apears to be less risky and, when comparing its historical volatility, Risuntek is 2.67 times less risky than Vicor. The stock trades about -0.02 of its potential returns per unit of risk. The Vicor is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  4,832  in Vicor on December 31, 2024 and sell it today you would earn a total of  8.00  from holding Vicor or generate 0.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.08%
Values	Daily Returns

Risuntek  vs.  Vicor

Risuntek

Risk-Adjusted Performance

Very Weak

Over the last 90 days Risuntek has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Risuntek is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vicor

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vicor are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental indicators, Vicor may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Risuntek and Vicor

The main advantage of trading using opposite Risuntek and Vicor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Risuntek position performs unexpectedly, Vicor 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 Vicor will offset losses from the drop in Vicor's long position.

The idea behind Risuntek and Vicor pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.