Correlation Between VF and Ming Le

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

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

Diversification Opportunities for VF and Ming Le

0.3

Correlation Coefficient

VF  Ming Le

Weak diversification

The 3 months correlation between VF and Ming is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding VF Corp. and Ming Le Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Le Sports 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 Ming Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Le Sports has no effect on the direction of VF i.e., VF and Ming Le go up and down completely randomly.

Pair Corralation between VF and Ming Le

Assuming the 90 days horizon VF Corporation is expected to generate 0.92 times more return on investment than Ming Le. However, VF Corporation is 1.09 times less risky than Ming Le. It trades about 0.08 of its potential returns per unit of risk. Ming Le Sports is currently generating about 0.04 per unit of risk. If you would invest  1,695  in VF Corporation on October 3, 2024 and sell it today you would earn a total of  405.00  from holding VF Corporation or generate 23.89% return on investment over 90 days.

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

VF Corp.  vs.  Ming Le Sports

VF Corporation

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VF Corporation are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, VF reported solid returns over the last few months and may actually be approaching a breakup point.

Ming Le Sports

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ming Le Sports are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Ming Le reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VF and Ming Le

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

The idea behind VF Corporation and Ming Le Sports 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.