Correlation Between INEO Tech and VS Media

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

By analyzing existing cross correlation between INEO Tech Corp and VS Media Holdings, you can compare the effects of market volatilities on INEO Tech and VS Media 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 INEO Tech with a short position of VS Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of INEO Tech and VS Media.

Diversification Opportunities for INEO Tech and VS Media

0.33

Correlation Coefficient

INEO Tech  VS Media

Weak diversification

The 3 months correlation between INEO and VSME is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding INEO Tech Corp and VS Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VS Media Holdings and INEO Tech 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 INEO Tech Corp are associated (or correlated) with VS Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VS Media Holdings has no effect on the direction of INEO Tech i.e., INEO Tech and VS Media go up and down completely randomly.

Pair Corralation between INEO Tech and VS Media

Assuming the 90 days horizon INEO Tech Corp is expected to generate 0.97 times more return on investment than VS Media. However, INEO Tech Corp is 1.04 times less risky than VS Media. It trades about 0.04 of its potential returns per unit of risk. VS Media Holdings is currently generating about -0.02 per unit of risk. If you would invest  13.00  in INEO Tech Corp on October 7, 2024 and sell it today you would lose (9.00) from holding INEO Tech Corp or give up 69.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	64.46%
Values	Daily Returns

INEO Tech Corp  vs.  VS Media Holdings

INEO Tech Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INEO Tech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

VS Media Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VS Media Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, VS Media exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INEO Tech and VS Media

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

The idea behind INEO Tech Corp and VS Media 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.