Correlation Between IA Financial and VIP Entertainment

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

By analyzing existing cross correlation between iA Financial and VIP Entertainment Technologies, you can compare the effects of market volatilities on IA Financial and VIP Entertainment 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 IA Financial with a short position of VIP Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Financial and VIP Entertainment.

Diversification Opportunities for IA Financial and VIP Entertainment

0.0

Correlation Coefficient

IA Financial  VIP Entertainment

Pay attention - limited upside

The 3 months correlation between IAG and VIP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iA Financial and VIP Entertainment Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIP Entertainment and IA Financial 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 iA Financial are associated (or correlated) with VIP Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIP Entertainment has no effect on the direction of IA Financial i.e., IA Financial and VIP Entertainment go up and down completely randomly.

Pair Corralation between IA Financial and VIP Entertainment

If you would invest  13,276  in iA Financial on October 7, 2024 and sell it today you would lose (21.00) from holding iA Financial or give up 0.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.56%
Values	Daily Returns

iA Financial  vs.  VIP Entertainment Technologies

iA Financial

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iA Financial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, IA Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

VIP Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIP Entertainment Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, VIP Entertainment is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with IA Financial and VIP Entertainment

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

The idea behind iA Financial and VIP Entertainment Technologies 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.

Check out your portfolio center.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.