Correlation Between Video River and ACST Old

Can any of the company-specific risk be diversified away by investing in both Video River and ACST Old 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 Video River and ACST Old into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Video River Networks and ACST Old, you can compare the effects of market volatilities on Video River and ACST Old 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 Video River with a short position of ACST Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Video River and ACST Old.

Diversification Opportunities for Video River and ACST Old

-0.39

Correlation Coefficient

Video River  ACST Old

Very good diversification

The 3 months correlation between Video and ACST is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Video River Networks and ACST Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACST Old and Video River 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 Video River Networks are associated (or correlated) with ACST Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACST Old has no effect on the direction of Video River i.e., Video River and ACST Old go up and down completely randomly.

Pair Corralation between Video River and ACST Old

Given the investment horizon of 90 days Video River Networks is expected to generate 4.72 times more return on investment than ACST Old. However, Video River is 4.72 times more volatile than ACST Old. It trades about 0.07 of its potential returns per unit of risk. ACST Old is currently generating about 0.0 per unit of risk. If you would invest  2.45  in Video River Networks on October 10, 2024 and sell it today you would lose (2.18) from holding Video River Networks or give up 88.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.12%
Values	Daily Returns

Video River Networks  vs.  ACST Old

Video River Networks

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Video River Networks are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical indicators, Video River disclosed solid returns over the last few months and may actually be approaching a breakup point.

ACST Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ACST Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ACST Old is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Video River and ACST Old

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

The idea behind Video River Networks and ACST Old 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.