Correlation Between Flexible Solutions and Village Super

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

By analyzing existing cross correlation between Flexible Solutions International and Village Super Market, you can compare the effects of market volatilities on Flexible Solutions and Village Super 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 Flexible Solutions with a short position of Village Super. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and Village Super.

Diversification Opportunities for Flexible Solutions and Village Super

0.17

Correlation Coefficient

Flexible Solutions  Village Super

Average diversification

The 3 months correlation between Flexible and Village is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and Village Super Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Village Super Market and Flexible Solutions 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 Flexible Solutions International are associated (or correlated) with Village Super. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Village Super Market has no effect on the direction of Flexible Solutions i.e., Flexible Solutions and Village Super go up and down completely randomly.

Pair Corralation between Flexible Solutions and Village Super

Considering the 90-day investment horizon Flexible Solutions International is expected to under-perform the Village Super. But the stock apears to be less risky and, when comparing its historical volatility, Flexible Solutions International is 1.26 times less risky than Village Super. The stock trades about -0.08 of its potential returns per unit of risk. The Village Super Market is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,205  in Village Super Market on October 12, 2024 and sell it today you would earn a total of  46.00  from holding Village Super Market or generate 1.44% return on investment over 90 days.

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

Flexible Solutions Internation  vs.  Village Super Market

Flexible Solutions

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Flexible Solutions International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Flexible Solutions may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Village Super Market

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Village Super Market are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Village Super may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Flexible Solutions and Village Super

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

The idea behind Flexible Solutions International and Village Super Market 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.