Correlation Between VIP Entertainment and CHAR Technologies

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

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

Diversification Opportunities for VIP Entertainment and CHAR Technologies

0.0

Correlation Coefficient

VIP Entertainment  CHAR Technologies

Pay attention - limited upside

The 3 months correlation between VIP and CHAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VIP Entertainment Technologies and CHAR Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHAR Technologies and VIP Entertainment 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 VIP Entertainment Technologies are associated (or correlated) with CHAR Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHAR Technologies has no effect on the direction of VIP Entertainment i.e., VIP Entertainment and CHAR Technologies go up and down completely randomly.

Pair Corralation between VIP Entertainment and CHAR Technologies

Assuming the 90 days horizon VIP Entertainment Technologies is expected to under-perform the CHAR Technologies. In addition to that, VIP Entertainment is 2.3 times more volatile than CHAR Technologies. It trades about -0.03 of its total potential returns per unit of risk. CHAR Technologies is currently generating about 0.0 per unit of volatility. If you would invest  33.00  in CHAR Technologies on October 4, 2024 and sell it today you would lose (14.00) from holding CHAR Technologies or give up 42.42% of portfolio value over 90 days.

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

VIP Entertainment Technologies  vs.  CHAR Technologies

VIP Entertainment

Risk-Adjusted Performance

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Very Weak

Over the last 90 days VIP Entertainment Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, VIP Entertainment is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

CHAR Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHAR Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with VIP Entertainment and CHAR Technologies

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

The idea behind VIP Entertainment Technologies and CHAR 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.