Correlation Between GeoVision and Vivotek

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

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

Diversification Opportunities for GeoVision and Vivotek

0.34

Correlation Coefficient

GeoVision  Vivotek

Weak diversification

The 3 months correlation between GeoVision and Vivotek is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding GeoVision and Vivotek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivotek and GeoVision 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 GeoVision 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 GeoVision i.e., GeoVision and Vivotek go up and down completely randomly.

Pair Corralation between GeoVision and Vivotek

Assuming the 90 days trading horizon GeoVision is expected to under-perform the Vivotek. But the stock apears to be less risky and, when comparing its historical volatility, GeoVision is 1.4 times less risky than Vivotek. The stock trades about -0.13 of its potential returns per unit of risk. The Vivotek is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  12,000  in Vivotek on October 25, 2024 and sell it today you would earn a total of  800.00  from holding Vivotek or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

GeoVision  vs.  Vivotek

GeoVision

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GeoVision has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Vivotek

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with GeoVision and Vivotek

The main advantage of trading using opposite GeoVision and Vivotek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GeoVision 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 GeoVision 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.

Check out your portfolio center.

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.