Correlation Between V V and Eyebright Medical

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

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

Diversification Opportunities for V V and Eyebright Medical

-0.15

Correlation Coefficient

V V  Eyebright Medical

Good diversification

The 3 months correlation between 600300 and Eyebright is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding V V Food and Eyebright Medical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eyebright Medical and V V 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 V V Food are associated (or correlated) with Eyebright Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eyebright Medical has no effect on the direction of V V i.e., V V and Eyebright Medical go up and down completely randomly.

Pair Corralation between V V and Eyebright Medical

Assuming the 90 days trading horizon V V Food is expected to under-perform the Eyebright Medical. In addition to that, V V is 1.6 times more volatile than Eyebright Medical Technology. It trades about -0.16 of its total potential returns per unit of risk. Eyebright Medical Technology is currently generating about 0.08 per unit of volatility. If you would invest  9,366  in Eyebright Medical Technology on October 12, 2024 and sell it today you would earn a total of  323.00  from holding Eyebright Medical Technology or generate 3.45% return on investment over 90 days.

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

V V Food  vs.  Eyebright Medical Technology

V V Food

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in V V Food are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, V V sustained solid returns over the last few months and may actually be approaching a breakup point.

Eyebright Medical

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eyebright Medical Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Eyebright Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with V V and Eyebright Medical

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

The idea behind V V Food and Eyebright Medical 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..