Correlation Between United States and VivoPower International

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

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

Diversification Opportunities for United States and VivoPower International

-0.9

Correlation Coefficient

United States  VivoPower International

Pay attention - limited upside

The 3 months correlation between United and VivoPower is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding United States Cellular and VivoPower International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VivoPower International and United States 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 United States Cellular 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 United States i.e., United States and VivoPower International go up and down completely randomly.

Pair Corralation between United States and VivoPower International

Considering the 90-day investment horizon United States Cellular is expected to generate 0.04 times more return on investment than VivoPower International. However, United States Cellular is 23.13 times less risky than VivoPower International. It trades about 0.27 of its potential returns per unit of risk. VivoPower International PLC is currently generating about 0.0 per unit of risk. If you would invest  2,104  in United States Cellular on August 31, 2024 and sell it today you would earn a total of  209.00  from holding United States Cellular or generate 9.93% return on investment over 90 days.

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

United States Cellular  vs.  VivoPower International PLC

United States Cellular

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in United States Cellular are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, United States may actually be approaching a critical reversion point that can send shares even higher in December 2024.

VivoPower International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VivoPower International PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, VivoPower International is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with United States and VivoPower International

The main advantage of trading using opposite United States and VivoPower International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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 United States Cellular 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.