Correlation Between Cicor Technologies and VP Bank

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

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

Diversification Opportunities for Cicor Technologies and VP Bank

0.6

Correlation Coefficient

Cicor Technologies  VP Bank

Poor diversification

The 3 months correlation between Cicor and VPBN is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cicor Technologies and VP Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VP Bank AG and Cicor 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 Cicor Technologies are associated (or correlated) with VP Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VP Bank AG has no effect on the direction of Cicor Technologies i.e., Cicor Technologies and VP Bank go up and down completely randomly.

Pair Corralation between Cicor Technologies and VP Bank

Assuming the 90 days trading horizon Cicor Technologies is expected to generate 0.93 times more return on investment than VP Bank. However, Cicor Technologies is 1.08 times less risky than VP Bank. It trades about 0.04 of its potential returns per unit of risk. VP Bank AG is currently generating about -0.01 per unit of risk. If you would invest  4,730  in Cicor Technologies on September 28, 2024 and sell it today you would earn a total of  890.00  from holding Cicor Technologies or generate 18.82% return on investment over 90 days.

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

Cicor Technologies  vs.  VP Bank AG

Cicor Technologies

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cicor Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Cicor Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

VP Bank AG

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VP Bank AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, VP Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cicor Technologies and VP Bank

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

The idea behind Cicor Technologies and VP Bank AG 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.