Correlation Between VF and Neo Concept

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

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

Diversification Opportunities for VF and Neo Concept

0.34

Correlation Coefficient

VF  Neo Concept

Weak diversification

The 3 months correlation between VF and Neo is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding VF Corp. and Neo Concept International Grou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Concept Internat and VF 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 VF Corporation are associated (or correlated) with Neo Concept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Concept Internat has no effect on the direction of VF i.e., VF and Neo Concept go up and down completely randomly.

Pair Corralation between VF and Neo Concept

Considering the 90-day investment horizon VF Corporation is expected to generate 0.57 times more return on investment than Neo Concept. However, VF Corporation is 1.75 times less risky than Neo Concept. It trades about -0.11 of its potential returns per unit of risk. Neo Concept International Group is currently generating about -0.06 per unit of risk. If you would invest  2,152  in VF Corporation on December 16, 2024 and sell it today you would lose (490.00) from holding VF Corporation or give up 22.77% of portfolio value over 90 days.

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

VF Corp.  vs.  Neo Concept International Grou

VF Corporation

Risk-Adjusted Performance

Very Weak

Over the last 90 days VF Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Neo Concept Internat

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neo Concept International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with VF and Neo Concept

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

The idea behind VF Corporation and Neo Concept International 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.