Correlation Between VHAI and Technology Fund

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

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

Diversification Opportunities for VHAI and Technology Fund

0.0

Correlation Coefficient

VHAI  Technology Fund

Pay attention - limited upside

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

Pair Corralation between VHAI and Technology Fund

If you would invest (100.00) in VHAI on December 2, 2024 and sell it today you would earn a total of  100.00  from holding VHAI or generate -100.0% return on investment over 90 days.

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

VHAI  vs.  Technology Fund Investor

VHAI

Risk-Adjusted Performance

Very Weak

Over the last 90 days VHAI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, VHAI is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Technology Fund Investor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Technology Fund Investor has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with VHAI and Technology Fund

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

The idea behind VHAI and Technology Fund Investor 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.