Correlation Between Vodka Brands and Safety Shot

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

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

Diversification Opportunities for Vodka Brands and Safety Shot

-0.75

Correlation Coefficient

Vodka Brands  Safety Shot

Pay attention - limited upside

The 3 months correlation between Vodka and Safety is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Vodka Brands Corp and Safety Shot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Shot and Vodka Brands 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 Vodka Brands Corp are associated (or correlated) with Safety Shot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Shot has no effect on the direction of Vodka Brands i.e., Vodka Brands and Safety Shot go up and down completely randomly.

Pair Corralation between Vodka Brands and Safety Shot

Given the investment horizon of 90 days Vodka Brands Corp is expected to generate 0.52 times more return on investment than Safety Shot. However, Vodka Brands Corp is 1.92 times less risky than Safety Shot. It trades about 0.05 of its potential returns per unit of risk. Safety Shot is currently generating about -0.13 per unit of risk. If you would invest  107.00  in Vodka Brands Corp on December 25, 2024 and sell it today you would earn a total of  7.00  from holding Vodka Brands Corp or generate 6.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.16%
Values	Daily Returns

Vodka Brands Corp  vs.  Safety Shot

Vodka Brands Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vodka Brands Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward-looking signals, Vodka Brands may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Safety Shot

Risk-Adjusted Performance

Very Weak

Over the last 90 days Safety Shot 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Vodka Brands and Safety Shot

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

The idea behind Vodka Brands Corp and Safety Shot 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.