Correlation Between Vicor and Neonode

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

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

Diversification Opportunities for Vicor and Neonode

0.06

Correlation Coefficient

Vicor  Neonode

Significant diversification

The 3 months correlation between Vicor and Neonode is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Vicor and Neonode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neonode 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 Neonode. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neonode has no effect on the direction of Vicor i.e., Vicor and Neonode go up and down completely randomly.

Pair Corralation between Vicor and Neonode

Given the investment horizon of 90 days Vicor is expected to generate 1.55 times more return on investment than Neonode. However, Vicor is 1.55 times more volatile than Neonode. It trades about 0.04 of its potential returns per unit of risk. Neonode is currently generating about 0.03 per unit of risk. If you would invest  4,910  in Vicor on December 28, 2024 and sell it today you would earn a total of  153.00  from holding Vicor or generate 3.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Vicor  vs.  Neonode

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 reported solid returns over the last few months and may actually be approaching a breakup point.

Neonode

Risk-Adjusted Performance

Weak

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

Pair Trading with Vicor and Neonode

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

The idea behind Vicor and Neonode 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.