Correlation Between Vecima Networks and Stingray

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

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

Diversification Opportunities for Vecima Networks and Stingray

-0.4

Correlation Coefficient

Vecima Networks  Stingray

Very good diversification

The 3 months correlation between Vecima and Stingray is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Vecima Networks and Stingray Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stingray Group and Vecima Networks 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 Vecima Networks are associated (or correlated) with Stingray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stingray Group has no effect on the direction of Vecima Networks i.e., Vecima Networks and Stingray go up and down completely randomly.

Pair Corralation between Vecima Networks and Stingray

Assuming the 90 days trading horizon Vecima Networks is expected to under-perform the Stingray. In addition to that, Vecima Networks is 2.61 times more volatile than Stingray Group. It trades about -0.17 of its total potential returns per unit of risk. Stingray Group is currently generating about -0.29 per unit of volatility. If you would invest  785.00  in Stingray Group on October 9, 2024 and sell it today you would lose (40.00) from holding Stingray Group or give up 5.1% of portfolio value over 90 days.

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

Vecima Networks  vs.  Stingray Group

Vecima Networks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vecima Networks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Stingray Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stingray Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Stingray is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vecima Networks and Stingray

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

The idea behind Vecima Networks and Stingray Group 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.

Check out your portfolio center.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.