Correlation Between Café Serendipity and Vapor

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

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

Diversification Opportunities for Café Serendipity and Vapor

0.0

Correlation Coefficient

Café Serendipity  Vapor

Pay attention - limited upside

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

Pair Corralation between Café Serendipity and Vapor

If you would invest  0.01  in Vapor Group on October 25, 2024 and sell it today you would earn a total of  0.00  from holding Vapor Group or generate 0.0% return on investment over 90 days.

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

Caf Serendipity Holdings  vs.  Vapor Group

Caf Serendipity Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Caf Serendipity Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Café Serendipity unveiled solid returns over the last few months and may actually be approaching a breakup point.

Vapor Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vapor Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Vapor is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Café Serendipity and Vapor

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

The idea behind Caf Serendipity Holdings and Vapor Group 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.