Correlation Between Yageo Corp and Vivotek

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

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

Diversification Opportunities for Yageo Corp and Vivotek

0.19

Correlation Coefficient

Yageo Corp  Vivotek

Average diversification

The 3 months correlation between Yageo and Vivotek is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Yageo Corp and Vivotek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivotek and Yageo Corp 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 Yageo Corp are associated (or correlated) with Vivotek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivotek has no effect on the direction of Yageo Corp i.e., Yageo Corp and Vivotek go up and down completely randomly.

Pair Corralation between Yageo Corp and Vivotek

Assuming the 90 days trading horizon Yageo Corp is expected to generate 15.73 times less return on investment than Vivotek. But when comparing it to its historical volatility, Yageo Corp is 1.73 times less risky than Vivotek. It trades about 0.02 of its potential returns per unit of risk. Vivotek is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  11,800  in Vivotek on December 24, 2024 and sell it today you would earn a total of  3,450  from holding Vivotek or generate 29.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Yageo Corp  vs.  Vivotek

Yageo Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yageo Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Yageo Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Vivotek

Risk-Adjusted Performance

Good

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

Pair Trading with Yageo Corp and Vivotek

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

The idea behind Yageo Corp and Vivotek 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.