Correlation Between SKONEC Entertainment and VAIV

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

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

Diversification Opportunities for SKONEC Entertainment and VAIV

0.84

Correlation Coefficient

SKONEC Entertainment  VAIV

Very poor diversification

The 3 months correlation between SKONEC and VAIV is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SKONEC Entertainment Co and VAIV Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VAIV and SKONEC Entertainment 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 SKONEC Entertainment Co are associated (or correlated) with VAIV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VAIV has no effect on the direction of SKONEC Entertainment i.e., SKONEC Entertainment and VAIV go up and down completely randomly.

Pair Corralation between SKONEC Entertainment and VAIV

Assuming the 90 days trading horizon SKONEC Entertainment Co is expected to generate 0.95 times more return on investment than VAIV. However, SKONEC Entertainment Co is 1.06 times less risky than VAIV. It trades about -0.03 of its potential returns per unit of risk. VAIV Co is currently generating about -0.05 per unit of risk. If you would invest  308,500  in SKONEC Entertainment Co on September 12, 2024 and sell it today you would lose (30,500) from holding SKONEC Entertainment Co or give up 9.89% of portfolio value over 90 days.

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

SKONEC Entertainment Co  vs.  VAIV Co

SKONEC Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SKONEC Entertainment Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

VAIV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VAIV Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with SKONEC Entertainment and VAIV

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

The idea behind SKONEC Entertainment Co and VAIV Co 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.