Correlation Between VAT Group and U Blox

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

By analyzing existing cross correlation between VAT Group AG and U Blox Holding, you can compare the effects of market volatilities on VAT Group and U Blox 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 VAT Group with a short position of U Blox. Check out your portfolio center. Please also check ongoing floating volatility patterns of VAT Group and U Blox.

Diversification Opportunities for VAT Group and U Blox

0.07

Correlation Coefficient

VAT Group  U Blox

Significant diversification

The 3 months correlation between VAT and UBXN is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding VAT Group AG and U Blox Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Blox Holding and VAT Group 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 VAT Group AG are associated (or correlated) with U Blox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Blox Holding has no effect on the direction of VAT Group i.e., VAT Group and U Blox go up and down completely randomly.

Pair Corralation between VAT Group and U Blox

Assuming the 90 days trading horizon VAT Group is expected to generate 5.72 times less return on investment than U Blox. But when comparing it to its historical volatility, VAT Group AG is 1.3 times less risky than U Blox. It trades about 0.03 of its potential returns per unit of risk. U Blox Holding is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  6,930  in U Blox Holding on December 20, 2024 and sell it today you would earn a total of  1,360  from holding U Blox Holding or generate 19.62% return on investment over 90 days.

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

VAT Group AG  vs.  U Blox Holding

VAT Group AG

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VAT Group AG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, VAT Group is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

U Blox Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in U Blox Holding are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, U Blox showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VAT Group and U Blox

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

The idea behind VAT Group AG and U Blox Holding 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.