Correlation Between Vita Coco and Highest Performances

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

By analyzing existing cross correlation between Vita Coco and Highest Performances Holdings, you can compare the effects of market volatilities on Vita Coco and Highest Performances 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 Highest Performances. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vita Coco and Highest Performances.

Diversification Opportunities for Vita Coco and Highest Performances

-0.79

Correlation Coefficient

Vita Coco  Highest Performances

Pay attention - limited upside

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

Pair Corralation between Vita Coco and Highest Performances

Given the investment horizon of 90 days Vita Coco is expected to generate 0.38 times more return on investment than Highest Performances. However, Vita Coco is 2.6 times less risky than Highest Performances. It trades about 0.08 of its potential returns per unit of risk. Highest Performances Holdings is currently generating about -0.04 per unit of risk. If you would invest  1,323  in Vita Coco on October 10, 2024 and sell it today you would earn a total of  2,078  from holding Vita Coco or generate 157.07% return on investment over 90 days.

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

Vita Coco  vs.  Highest Performances Holdings

Vita Coco

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vita Coco are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, Vita Coco displayed solid returns over the last few months and may actually be approaching a breakup point.

Highest Performances

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Highest Performances Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Vita Coco and Highest Performances

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

The idea behind Vita Coco and Highest Performances Holdings 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.