Correlation Between Twin Vee and On Holding

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

By analyzing existing cross correlation between Twin Vee Powercats and On Holding, you can compare the effects of market volatilities on Twin Vee and On Holding 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 Twin Vee with a short position of On Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twin Vee and On Holding.

Diversification Opportunities for Twin Vee and On Holding

-0.44

Correlation Coefficient

Twin Vee  On Holding

Very good diversification

The 3 months correlation between Twin and ONON is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Twin Vee Powercats and On Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on On Holding and Twin Vee 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 Twin Vee Powercats are associated (or correlated) with On Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of On Holding has no effect on the direction of Twin Vee i.e., Twin Vee and On Holding go up and down completely randomly.

Pair Corralation between Twin Vee and On Holding

Given the investment horizon of 90 days Twin Vee Powercats is expected to generate 8.1 times more return on investment than On Holding. However, Twin Vee is 8.1 times more volatile than On Holding. It trades about 0.15 of its potential returns per unit of risk. On Holding is currently generating about 0.17 per unit of risk. If you would invest  36.00  in Twin Vee Powercats on October 27, 2024 and sell it today you would earn a total of  11.00  from holding Twin Vee Powercats or generate 30.56% return on investment over 90 days.

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

Twin Vee Powercats  vs.  On Holding

Twin Vee Powercats

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Twin Vee Powercats are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Twin Vee exhibited solid returns over the last few months and may actually be approaching a breakup point.

On Holding

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in On Holding are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, On Holding displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Twin Vee and On Holding

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

The idea behind Twin Vee Powercats and On Holding 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.