Correlation Between 50249AAJ2 and Vestis

Can any of the company-specific risk be diversified away by investing in both 50249AAJ2 and Vestis 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 50249AAJ2 and Vestis into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LYB INTERNATIONAL FINANCE and Vestis, you can compare the effects of market volatilities on 50249AAJ2 and Vestis 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 50249AAJ2 with a short position of Vestis. Check out your portfolio center. Please also check ongoing floating volatility patterns of 50249AAJ2 and Vestis.

Diversification Opportunities for 50249AAJ2 and Vestis

-0.17

Correlation Coefficient

50249AAJ2  Vestis

Good diversification

The 3 months correlation between 50249AAJ2 and Vestis is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding LYB INTERNATIONAL FINANCE and Vestis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestis and 50249AAJ2 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 LYB INTERNATIONAL FINANCE are associated (or correlated) with Vestis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestis has no effect on the direction of 50249AAJ2 i.e., 50249AAJ2 and Vestis go up and down completely randomly.

Pair Corralation between 50249AAJ2 and Vestis

Assuming the 90 days trading horizon LYB INTERNATIONAL FINANCE is expected to generate 0.5 times more return on investment than Vestis. However, LYB INTERNATIONAL FINANCE is 2.01 times less risky than Vestis. It trades about 0.09 of its potential returns per unit of risk. Vestis is currently generating about -0.31 per unit of risk. If you would invest  6,722  in LYB INTERNATIONAL FINANCE on December 23, 2024 and sell it today you would earn a total of  438.00  from holding LYB INTERNATIONAL FINANCE or generate 6.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

LYB INTERNATIONAL FINANCE  vs.  Vestis

LYB INTERNATIONAL FINANCE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LYB INTERNATIONAL FINANCE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 50249AAJ2 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Vestis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vestis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with 50249AAJ2 and Vestis

The main advantage of trading using opposite 50249AAJ2 and Vestis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 50249AAJ2 position performs unexpectedly, Vestis 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 Vestis will offset losses from the drop in Vestis' long position.

The idea behind LYB INTERNATIONAL FINANCE and Vestis 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.