Correlation Between Din Capital and Vincom Retail

Can any of the company-specific risk be diversified away by investing in both Din Capital and Vincom Retail 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 Din Capital and Vincom Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Din Capital Investment and Vincom Retail JSC, you can compare the effects of market volatilities on Din Capital and Vincom Retail 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 Din Capital with a short position of Vincom Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Din Capital and Vincom Retail.

Diversification Opportunities for Din Capital and Vincom Retail

-0.58

Correlation Coefficient

Din Capital  Vincom Retail

Excellent diversification

The 3 months correlation between Din and Vincom is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital Investment and Vincom Retail JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vincom Retail JSC and Din Capital 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 Din Capital Investment are associated (or correlated) with Vincom Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vincom Retail JSC has no effect on the direction of Din Capital i.e., Din Capital and Vincom Retail go up and down completely randomly.

Pair Corralation between Din Capital and Vincom Retail

Assuming the 90 days trading horizon Din Capital Investment is expected to generate 1.43 times more return on investment than Vincom Retail. However, Din Capital is 1.43 times more volatile than Vincom Retail JSC. It trades about 0.1 of its potential returns per unit of risk. Vincom Retail JSC is currently generating about -0.14 per unit of risk. If you would invest  930,000  in Din Capital Investment on September 17, 2024 and sell it today you would earn a total of  90,000  from holding Din Capital Investment or generate 9.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.77%
Values	Daily Returns

Din Capital Investment  vs.  Vincom Retail JSC

Din Capital Investment

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Din Capital Investment are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Din Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vincom Retail JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vincom Retail JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Din Capital and Vincom Retail

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

The idea behind Din Capital Investment and Vincom Retail JSC 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..