Correlation Between VCI Global and Perma Fix

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

By analyzing existing cross correlation between VCI Global Limited and Perma Fix Environmental Svcs, you can compare the effects of market volatilities on VCI Global and Perma Fix 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 VCI Global with a short position of Perma Fix. Check out your portfolio center. Please also check ongoing floating volatility patterns of VCI Global and Perma Fix.

Diversification Opportunities for VCI Global and Perma Fix

0.86

Correlation Coefficient

VCI Global  Perma Fix

Very poor diversification

The 3 months correlation between VCI and Perma is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding VCI Global Limited and Perma Fix Environmental Svcs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perma Fix Environmental and VCI Global 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 VCI Global Limited are associated (or correlated) with Perma Fix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perma Fix Environmental has no effect on the direction of VCI Global i.e., VCI Global and Perma Fix go up and down completely randomly.

Pair Corralation between VCI Global and Perma Fix

Given the investment horizon of 90 days VCI Global Limited is expected to under-perform the Perma Fix. In addition to that, VCI Global is 3.05 times more volatile than Perma Fix Environmental Svcs. It trades about -0.16 of its total potential returns per unit of risk. Perma Fix Environmental Svcs is currently generating about -0.17 per unit of volatility. If you would invest  1,085  in Perma Fix Environmental Svcs on December 27, 2024 and sell it today you would lose (302.00) from holding Perma Fix Environmental Svcs or give up 27.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

VCI Global Limited  vs.  Perma Fix Environmental Svcs

VCI Global Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days VCI Global Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Perma Fix Environmental

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perma Fix Environmental Svcs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with VCI Global and Perma Fix

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

The idea behind VCI Global Limited and Perma Fix Environmental Svcs 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.