Correlation Between VF and Roth CH

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

By analyzing existing cross correlation between VF Corporation and Roth CH Acquisition, you can compare the effects of market volatilities on VF and Roth CH 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 Roth CH. Check out your portfolio center. Please also check ongoing floating volatility patterns of VF and Roth CH.

Diversification Opportunities for VF and Roth CH

0.0

Correlation Coefficient

VF  Roth CH

Pay attention - limited upside

The 3 months correlation between VF and Roth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VF Corp. and Roth CH Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roth CH Acquisition 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 Roth CH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roth CH Acquisition has no effect on the direction of VF i.e., VF and Roth CH go up and down completely randomly.

Pair Corralation between VF and Roth CH

If you would invest  1,525  in VF Corporation on December 8, 2024 and sell it today you would earn a total of  531.00  from holding VF Corporation or generate 34.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

VF Corp.  vs.  Roth CH Acquisition

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 latest inconsistent performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Roth CH Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days Roth CH Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Roth CH is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with VF and Roth CH

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

The idea behind VF Corporation and Roth CH Acquisition 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.