Correlation Between Vitec Software and One Media

Can any of the company-specific risk be diversified away by investing in both Vitec Software and One Media 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 One Media 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 One Media iP, you can compare the effects of market volatilities on Vitec Software and One Media 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 One Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vitec Software and One Media.

Diversification Opportunities for Vitec Software and One Media

0.65

Correlation Coefficient

Vitec Software  One Media

Poor diversification

The 3 months correlation between Vitec and One is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Vitec Software Group and One Media iP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Media iP 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 One Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Media iP has no effect on the direction of Vitec Software i.e., Vitec Software and One Media go up and down completely randomly.

Pair Corralation between Vitec Software and One Media

Assuming the 90 days trading horizon Vitec Software Group is expected to under-perform the One Media. But the stock apears to be less risky and, when comparing its historical volatility, Vitec Software Group is 1.32 times less risky than One Media. The stock trades about 0.0 of its potential returns per unit of risk. The One Media iP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  375.00  in One Media iP on October 20, 2024 and sell it today you would earn a total of  50.00  from holding One Media iP or generate 13.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.21%
Values	Daily Returns

Vitec Software Group  vs.  One Media iP

Vitec Software Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vitec Software Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Vitec Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

One Media iP

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in One Media iP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, One Media may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Vitec Software and One Media

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

The idea behind Vitec Software Group and One Media iP 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 Transaction History module to view history of all your transactions and understand their impact on performance.