Correlation Between Via Renewables and Keen Vision

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

By analyzing existing cross correlation between Via Renewables and Keen Vision Acquisition, you can compare the effects of market volatilities on Via Renewables and Keen Vision 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 Via Renewables with a short position of Keen Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Via Renewables and Keen Vision.

Diversification Opportunities for Via Renewables and Keen Vision

0.09

Correlation Coefficient

Via Renewables  Keen Vision

Significant diversification

The 3 months correlation between Via and Keen is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables and Keen Vision Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keen Vision Acquisition and Via Renewables 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 Via Renewables are associated (or correlated) with Keen Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keen Vision Acquisition has no effect on the direction of Via Renewables i.e., Via Renewables and Keen Vision go up and down completely randomly.

Pair Corralation between Via Renewables and Keen Vision

Assuming the 90 days horizon Via Renewables is expected to generate 20.02 times less return on investment than Keen Vision. But when comparing it to its historical volatility, Via Renewables is 15.47 times less risky than Keen Vision. It trades about 0.03 of its potential returns per unit of risk. Keen Vision Acquisition is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,132  in Keen Vision Acquisition on October 3, 2024 and sell it today you would lose (33.00) from holding Keen Vision Acquisition or give up 2.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.34%
Values	Daily Returns

Via Renewables  vs.  Keen Vision Acquisition

Via Renewables

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Via Renewables reported solid returns over the last few months and may actually be approaching a breakup point.

Keen Vision Acquisition

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Keen Vision Acquisition are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal fundamental indicators, Keen Vision may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Via Renewables and Keen Vision

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

The idea behind Via Renewables and Keen Vision Acquisition 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.