Correlation Between Vitec Software and Judges Scientific

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

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

Diversification Opportunities for Vitec Software and Judges Scientific

-0.59

Correlation Coefficient

Vitec Software  Judges Scientific

Excellent diversification

The 3 months correlation between Vitec and Judges is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Vitec Software Group and Judges Scientific Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Judges Scientific Plc and Vitec Software 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 Vitec Software Group are associated (or correlated) with Judges Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Judges Scientific Plc has no effect on the direction of Vitec Software i.e., Vitec Software and Judges Scientific go up and down completely randomly.

Pair Corralation between Vitec Software and Judges Scientific

Assuming the 90 days trading horizon Vitec Software Group is expected to generate 1.33 times more return on investment than Judges Scientific. However, Vitec Software is 1.33 times more volatile than Judges Scientific Plc. It trades about 0.06 of its potential returns per unit of risk. Judges Scientific Plc is currently generating about -0.42 per unit of risk. If you would invest  54,650  in Vitec Software Group on October 27, 2024 and sell it today you would earn a total of  1,500  from holding Vitec Software Group or generate 2.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Vitec Software Group  vs.  Judges Scientific Plc

Vitec Software Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vitec Software Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Vitec Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

Judges Scientific Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Judges Scientific Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Vitec Software and Judges Scientific

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

The idea behind Vitec Software Group and Judges Scientific Plc 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..