Correlation Between CEO Group and Vincom Retail

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

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

Diversification Opportunities for CEO Group and Vincom Retail

0.79

Correlation Coefficient

CEO Group  Vincom Retail

Poor diversification

The 3 months correlation between CEO and Vincom is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding CEO Group JSC and Vincom Retail JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vincom Retail JSC and CEO Group 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 CEO Group JSC are associated (or correlated) with Vincom Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vincom Retail JSC has no effect on the direction of CEO Group i.e., CEO Group and Vincom Retail go up and down completely randomly.

Pair Corralation between CEO Group and Vincom Retail

Assuming the 90 days trading horizon CEO Group JSC is expected to under-perform the Vincom Retail. In addition to that, CEO Group is 1.49 times more volatile than Vincom Retail JSC. It trades about -0.13 of its total potential returns per unit of risk. Vincom Retail JSC is currently generating about -0.09 per unit of volatility. If you would invest  1,830,000  in Vincom Retail JSC on October 4, 2024 and sell it today you would lose (115,000) from holding Vincom Retail JSC or give up 6.28% of portfolio value over 90 days.

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

CEO Group JSC  vs.  Vincom Retail JSC

CEO Group JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CEO Group JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Vincom Retail JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vincom Retail JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Vincom Retail is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CEO Group and Vincom Retail

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

The idea behind CEO Group JSC and Vincom Retail JSC 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..