Correlation Between Vicor and Shenzhen Genvict

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

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

Diversification Opportunities for Vicor and Shenzhen Genvict

0.31

Correlation Coefficient

Vicor  Shenzhen Genvict

Weak diversification

The 3 months correlation between Vicor and Shenzhen is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Vicor and Shenzhen Genvict Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Genvict Tec and Vicor 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 Vicor are associated (or correlated) with Shenzhen Genvict. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Genvict Tec has no effect on the direction of Vicor i.e., Vicor and Shenzhen Genvict go up and down completely randomly.

Pair Corralation between Vicor and Shenzhen Genvict

Given the investment horizon of 90 days Vicor is expected to generate 2.08 times more return on investment than Shenzhen Genvict. However, Vicor is 2.08 times more volatile than Shenzhen Genvict Technologies. It trades about 0.06 of its potential returns per unit of risk. Shenzhen Genvict Technologies is currently generating about -0.06 per unit of risk. If you would invest  5,769  in Vicor on December 1, 2024 and sell it today you would earn a total of  564.00  from holding Vicor or generate 9.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.67%
Values	Daily Returns

Vicor  vs.  Shenzhen Genvict Technologies

Vicor

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vicor are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental indicators, Vicor reported solid returns over the last few months and may actually be approaching a breakup point.

Shenzhen Genvict Tec

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shenzhen Genvict Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Vicor and Shenzhen Genvict

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

The idea behind Vicor and Shenzhen Genvict Technologies 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.