Correlation Between Vicor and Alpha En

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

By analyzing existing cross correlation between Vicor and alpha En, you can compare the effects of market volatilities on Vicor and Alpha En 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 Alpha En. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vicor and Alpha En.

Diversification Opportunities for Vicor and Alpha En

0.45

Correlation Coefficient

Vicor  Alpha En

Very weak diversification

The 3 months correlation between Vicor and Alpha is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Vicor and alpha En in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alpha En 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 Alpha En. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alpha En has no effect on the direction of Vicor i.e., Vicor and Alpha En go up and down completely randomly.

Pair Corralation between Vicor and Alpha En

Given the investment horizon of 90 days Vicor is expected to generate 8.41 times less return on investment than Alpha En. But when comparing it to its historical volatility, Vicor is 2.18 times less risky than Alpha En. It trades about 0.03 of its potential returns per unit of risk. alpha En is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.01  in alpha En on December 27, 2024 and sell it today you would earn a total of  0.01  from holding alpha En or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Vicor  vs.  alpha En

Vicor

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vicor are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental indicators, Vicor may actually be approaching a critical reversion point that can send shares even higher in April 2025.

alpha En

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in alpha En are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Alpha En exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vicor and Alpha En

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

The idea behind Vicor and alpha En 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..