Correlation Between Vita Coco and Colabor

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

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

Diversification Opportunities for Vita Coco and Colabor

-0.73

Correlation Coefficient

Vita Coco  Colabor

Pay attention - limited upside

The 3 months correlation between Vita and Colabor is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Vita Coco and Colabor Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colabor Group and Vita Coco 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 Vita Coco are associated (or correlated) with Colabor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colabor Group has no effect on the direction of Vita Coco i.e., Vita Coco and Colabor go up and down completely randomly.

Pair Corralation between Vita Coco and Colabor

Given the investment horizon of 90 days Vita Coco is expected to under-perform the Colabor. In addition to that, Vita Coco is 1.18 times more volatile than Colabor Group. It trades about -0.09 of its total potential returns per unit of risk. Colabor Group is currently generating about 0.08 per unit of volatility. If you would invest  65.00  in Colabor Group on December 28, 2024 and sell it today you would earn a total of  7.00  from holding Colabor Group or generate 10.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Vita Coco  vs.  Colabor Group

Vita Coco

Risk-Adjusted Performance

Very Weak

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

Colabor Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Colabor Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Colabor reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vita Coco and Colabor

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

The idea behind Vita Coco and Colabor 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.