Correlation Between VCLO and Jacob Micro

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

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

Diversification Opportunities for VCLO and Jacob Micro

-0.77

Correlation Coefficient

VCLO  Jacob Micro

Pay attention - limited upside

The 3 months correlation between VCLO and Jacob is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding VCLO and Jacob Micro Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacob Micro Cap and VCLO 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 VCLO are associated (or correlated) with Jacob Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacob Micro Cap has no effect on the direction of VCLO i.e., VCLO and Jacob Micro go up and down completely randomly.

Pair Corralation between VCLO and Jacob Micro

If you would invest  2,237  in Jacob Micro Cap on September 17, 2024 and sell it today you would earn a total of  175.00  from holding Jacob Micro Cap or generate 7.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

VCLO  vs.  Jacob Micro Cap

VCLO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VCLO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, VCLO is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Jacob Micro Cap

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jacob Micro Cap are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Jacob Micro may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with VCLO and Jacob Micro

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

The idea behind VCLO and Jacob Micro Cap 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.