Correlation Between Visteon Corp and Safe

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

By analyzing existing cross correlation between Visteon Corp and Safe and Green, you can compare the effects of market volatilities on Visteon Corp and Safe 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 Visteon Corp with a short position of Safe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visteon Corp and Safe.

Diversification Opportunities for Visteon Corp and Safe

0.28

Correlation Coefficient

Visteon Corp  Safe

Modest diversification

The 3 months correlation between Visteon and Safe is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Visteon Corp and Safe and Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe and Green and Visteon Corp 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 Visteon Corp are associated (or correlated) with Safe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe and Green has no effect on the direction of Visteon Corp i.e., Visteon Corp and Safe go up and down completely randomly.

Pair Corralation between Visteon Corp and Safe

Allowing for the 90-day total investment horizon Visteon Corp is expected to generate 0.22 times more return on investment than Safe. However, Visteon Corp is 4.54 times less risky than Safe. It trades about -0.06 of its potential returns per unit of risk. Safe and Green is currently generating about -0.07 per unit of risk. If you would invest  9,142  in Visteon Corp on October 6, 2024 and sell it today you would lose (418.00) from holding Visteon Corp or give up 4.57% of portfolio value over 90 days.

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

Visteon Corp  vs.  Safe and Green

Visteon Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Visteon Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Visteon Corp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Safe and Green

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Safe and Green has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Visteon Corp and Safe

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

The idea behind Visteon Corp and Safe and Green 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.