Correlation Between CVC Technologies and Posiflex Technology

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

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

Diversification Opportunities for CVC Technologies and Posiflex Technology

-0.13

Correlation Coefficient

CVC Technologies  Posiflex Technology

Good diversification

The 3 months correlation between CVC and Posiflex is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding CVC Technologies and Posiflex Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posiflex Technology and CVC Technologies 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 CVC Technologies are associated (or correlated) with Posiflex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posiflex Technology has no effect on the direction of CVC Technologies i.e., CVC Technologies and Posiflex Technology go up and down completely randomly.

Pair Corralation between CVC Technologies and Posiflex Technology

Assuming the 90 days trading horizon CVC Technologies is expected to under-perform the Posiflex Technology. But the stock apears to be less risky and, when comparing its historical volatility, CVC Technologies is 1.36 times less risky than Posiflex Technology. The stock trades about -0.02 of its potential returns per unit of risk. The Posiflex Technology is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  12,200  in Posiflex Technology on October 9, 2024 and sell it today you would earn a total of  25,150  from holding Posiflex Technology or generate 206.15% return on investment over 90 days.

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

CVC Technologies  vs.  Posiflex Technology

CVC Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

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

Posiflex Technology

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Posiflex Technology are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Posiflex Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CVC Technologies and Posiflex Technology

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

The idea behind CVC Technologies and Posiflex Technology 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.