Correlation Between Vacasa and Exela Technologies

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

By analyzing existing cross correlation between Vacasa Inc and Exela Technologies Preferred, you can compare the effects of market volatilities on Vacasa and Exela Technologies 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 Vacasa with a short position of Exela Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vacasa and Exela Technologies.

Diversification Opportunities for Vacasa and Exela Technologies

-0.66

Correlation Coefficient

Vacasa  Exela Technologies

Excellent diversification

The 3 months correlation between Vacasa and Exela is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Vacasa Inc and Exela Technologies Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exela Technologies and Vacasa 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 Vacasa Inc are associated (or correlated) with Exela Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exela Technologies has no effect on the direction of Vacasa i.e., Vacasa and Exela Technologies go up and down completely randomly.

Pair Corralation between Vacasa and Exela Technologies

Given the investment horizon of 90 days Vacasa Inc is expected to generate 0.68 times more return on investment than Exela Technologies. However, Vacasa Inc is 1.48 times less risky than Exela Technologies. It trades about -0.03 of its potential returns per unit of risk. Exela Technologies Preferred is currently generating about -0.03 per unit of risk. If you would invest  3,060  in Vacasa Inc on October 11, 2024 and sell it today you would lose (2,560) from holding Vacasa Inc or give up 83.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	92.53%
Values	Daily Returns

Vacasa Inc  vs.  Exela Technologies Preferred

Vacasa Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vacasa Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Vacasa sustained solid returns over the last few months and may actually be approaching a breakup point.

Exela Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exela Technologies Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Preferred Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Vacasa and Exela Technologies

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

The idea behind Vacasa Inc and Exela Technologies Preferred 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.