Correlation Between Ivy Large and VivoPower International

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

By analyzing existing cross correlation between Ivy Large Cap and VivoPower International PLC, you can compare the effects of market volatilities on Ivy Large and VivoPower International 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 Ivy Large with a short position of VivoPower International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivy Large and VivoPower International.

Diversification Opportunities for Ivy Large and VivoPower International

-0.15

Correlation Coefficient

Ivy Large  VivoPower International

Good diversification

The 3 months correlation between Ivy and VivoPower is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ivy Large Cap and VivoPower International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VivoPower International and Ivy Large 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 Ivy Large Cap are associated (or correlated) with VivoPower International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VivoPower International has no effect on the direction of Ivy Large i.e., Ivy Large and VivoPower International go up and down completely randomly.

Pair Corralation between Ivy Large and VivoPower International

Assuming the 90 days horizon Ivy Large Cap is expected to under-perform the VivoPower International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ivy Large Cap is 21.14 times less risky than VivoPower International. The mutual fund trades about -0.11 of its potential returns per unit of risk. The VivoPower International PLC is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  134.00  in VivoPower International PLC on December 29, 2024 and sell it today you would earn a total of  258.00  from holding VivoPower International PLC or generate 192.54% return on investment over 90 days.

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

Ivy Large Cap  vs.  VivoPower International PLC

Ivy Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ivy Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

VivoPower International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VivoPower International PLC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, VivoPower International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ivy Large and VivoPower International

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

The idea behind Ivy Large Cap and VivoPower International PLC 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.