Correlation Between VGI Public and United Palm

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

By analyzing existing cross correlation between VGI Public and United Palm Oil, you can compare the effects of market volatilities on VGI Public and United Palm 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 VGI Public with a short position of United Palm. Check out your portfolio center. Please also check ongoing floating volatility patterns of VGI Public and United Palm.

Diversification Opportunities for VGI Public and United Palm

-0.03

Correlation Coefficient

VGI Public  United Palm

Good diversification

The 3 months correlation between VGI and United is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding VGI Public and United Palm Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Palm Oil and VGI Public 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 VGI Public are associated (or correlated) with United Palm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Palm Oil has no effect on the direction of VGI Public i.e., VGI Public and United Palm go up and down completely randomly.

Pair Corralation between VGI Public and United Palm

Assuming the 90 days trading horizon VGI Public is expected to generate 0.52 times more return on investment than United Palm. However, VGI Public is 1.91 times less risky than United Palm. It trades about 0.13 of its potential returns per unit of risk. United Palm Oil is currently generating about 0.06 per unit of risk. If you would invest  286.00  in VGI Public on December 30, 2024 and sell it today you would earn a total of  22.00  from holding VGI Public or generate 7.69% return on investment over 90 days.

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

VGI Public  vs.  United Palm Oil

VGI Public

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VGI Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, VGI Public may actually be approaching a critical reversion point that can send shares even higher in April 2025.

United Palm Oil

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in United Palm Oil are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, United Palm may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with VGI Public and United Palm

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

The idea behind VGI Public and United Palm Oil 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.