Correlation Between Vodka Brands and Viemed Healthcare

Can any of the company-specific risk be diversified away by investing in both Vodka Brands and Viemed Healthcare 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 Viemed Healthcare 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 Viemed Healthcare, you can compare the effects of market volatilities on Vodka Brands and Viemed Healthcare 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 Viemed Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodka Brands and Viemed Healthcare.

Diversification Opportunities for Vodka Brands and Viemed Healthcare

0.05

Correlation Coefficient

Vodka Brands  Viemed Healthcare

Significant diversification

The 3 months correlation between Vodka and Viemed is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Vodka Brands Corp and Viemed Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viemed Healthcare 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 Viemed Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viemed Healthcare has no effect on the direction of Vodka Brands i.e., Vodka Brands and Viemed Healthcare go up and down completely randomly.

Pair Corralation between Vodka Brands and Viemed Healthcare

Given the investment horizon of 90 days Vodka Brands Corp is expected to generate 1.74 times more return on investment than Viemed Healthcare. However, Vodka Brands is 1.74 times more volatile than Viemed Healthcare. It trades about 0.05 of its potential returns per unit of risk. Viemed Healthcare is currently generating about -0.11 per unit of risk. If you would invest  107.00  in Vodka Brands Corp on December 27, 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 Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Vodka Brands Corp  vs.  Viemed Healthcare

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.

Viemed Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Viemed Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Vodka Brands and Viemed Healthcare

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

The idea behind Vodka Brands Corp and Viemed Healthcare 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.