Correlation Between Vinci Partners and Solowin Holdings

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

By analyzing existing cross correlation between Vinci Partners Investments and Solowin Holdings Ordinary, you can compare the effects of market volatilities on Vinci Partners and Solowin Holdings 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 Vinci Partners with a short position of Solowin Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vinci Partners and Solowin Holdings.

Diversification Opportunities for Vinci Partners and Solowin Holdings

0.04

Correlation Coefficient

Vinci Partners  Solowin Holdings

Significant diversification

The 3 months correlation between Vinci and Solowin is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Vinci Partners Investments and Solowin Holdings Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solowin Holdings Ordinary and Vinci Partners 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 Vinci Partners Investments are associated (or correlated) with Solowin Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solowin Holdings Ordinary has no effect on the direction of Vinci Partners i.e., Vinci Partners and Solowin Holdings go up and down completely randomly.

Pair Corralation between Vinci Partners and Solowin Holdings

Given the investment horizon of 90 days Vinci Partners Investments is expected to generate 0.2 times more return on investment than Solowin Holdings. However, Vinci Partners Investments is 5.1 times less risky than Solowin Holdings. It trades about -0.05 of its potential returns per unit of risk. Solowin Holdings Ordinary is currently generating about -0.12 per unit of risk. If you would invest  1,029  in Vinci Partners Investments on November 29, 2024 and sell it today you would lose (54.00) from holding Vinci Partners Investments or give up 5.25% of portfolio value over 90 days.

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

Vinci Partners Investments  vs.  Solowin Holdings Ordinary

Vinci Partners Inves

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vinci Partners Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Vinci Partners is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Solowin Holdings Ordinary

Risk-Adjusted Performance

Very Weak

Over the last 90 days Solowin Holdings Ordinary has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's forward indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with Vinci Partners and Solowin Holdings

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

The idea behind Vinci Partners Investments and Solowin Holdings Ordinary 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.