Correlation Between Ballistic Recovery and VSE

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

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

Diversification Opportunities for Ballistic Recovery and VSE

0.0

Correlation Coefficient

Ballistic Recovery  VSE

Pay attention - limited upside

The 3 months correlation between Ballistic and VSE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ballistic Recovery Systems and VSE Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VSE Corporation and Ballistic Recovery 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 Ballistic Recovery Systems are associated (or correlated) with VSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VSE Corporation has no effect on the direction of Ballistic Recovery i.e., Ballistic Recovery and VSE go up and down completely randomly.

Pair Corralation between Ballistic Recovery and VSE

If you would invest  9,673  in VSE Corporation on December 28, 2024 and sell it today you would earn a total of  1,990  from holding VSE Corporation or generate 20.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Ballistic Recovery Systems  vs.  VSE Corp.

Ballistic Recovery

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ballistic Recovery Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Ballistic Recovery is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

VSE Corporation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VSE Corporation are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, VSE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ballistic Recovery and VSE

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

The idea behind Ballistic Recovery Systems and VSE Corporation 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.