Correlation Between VGP NV and Iep Invest

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

By analyzing existing cross correlation between VGP NV and Iep Invest, you can compare the effects of market volatilities on VGP NV and Iep Invest 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 VGP NV with a short position of Iep Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of VGP NV and Iep Invest.

Diversification Opportunities for VGP NV and Iep Invest

-0.29

Correlation Coefficient

VGP NV  Iep Invest

Very good diversification

The 3 months correlation between VGP and Iep is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding VGP NV and Iep Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iep Invest and VGP NV 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 VGP NV are associated (or correlated) with Iep Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iep Invest has no effect on the direction of VGP NV i.e., VGP NV and Iep Invest go up and down completely randomly.

Pair Corralation between VGP NV and Iep Invest

Assuming the 90 days trading horizon VGP NV is expected to generate 0.58 times more return on investment than Iep Invest. However, VGP NV is 1.72 times less risky than Iep Invest. It trades about 0.11 of its potential returns per unit of risk. Iep Invest is currently generating about -0.03 per unit of risk. If you would invest  7,120  in VGP NV on December 27, 2024 and sell it today you would earn a total of  810.00  from holding VGP NV or generate 11.38% return on investment over 90 days.

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

VGP NV  vs.  Iep Invest

VGP NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VGP NV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, VGP NV may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Iep Invest

Risk-Adjusted Performance

Very Weak

Over the last 90 days Iep Invest has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Iep Invest is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with VGP NV and Iep Invest

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

The idea behind VGP NV and Iep Invest 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.