Correlation Between VGP NV and Inclusio Sca

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

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

Diversification Opportunities for VGP NV and Inclusio Sca

0.57

Correlation Coefficient

VGP NV  Inclusio Sca

Very weak diversification

The 3 months correlation between VGP and Inclusio is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding VGP NV and Inclusio Sca in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inclusio Sca 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 Inclusio Sca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inclusio Sca has no effect on the direction of VGP NV i.e., VGP NV and Inclusio Sca go up and down completely randomly.

Pair Corralation between VGP NV and Inclusio Sca

Assuming the 90 days trading horizon VGP NV is expected to under-perform the Inclusio Sca. In addition to that, VGP NV is 1.16 times more volatile than Inclusio Sca. It trades about -0.19 of its total potential returns per unit of risk. Inclusio Sca is currently generating about -0.06 per unit of volatility. If you would invest  1,485  in Inclusio Sca on September 12, 2024 and sell it today you would lose (95.00) from holding Inclusio Sca or give up 6.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

VGP NV  vs.  Inclusio Sca

VGP NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VGP NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Inclusio Sca

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inclusio Sca has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Inclusio Sca is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with VGP NV and Inclusio Sca

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

The idea behind VGP NV and Inclusio Sca 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.

Check out your portfolio center.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.