Correlation Between Village Super and American Vanguard

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

By analyzing existing cross correlation between Village Super Market and American Vanguard, you can compare the effects of market volatilities on Village Super and American Vanguard 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 Village Super with a short position of American Vanguard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Super and American Vanguard.

Diversification Opportunities for Village Super and American Vanguard

0.0

Correlation Coefficient

Village Super  American Vanguard

Pay attention - limited upside

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

Pair Corralation between Village Super and American Vanguard

Assuming the 90 days horizon Village Super Market is expected to generate 0.79 times more return on investment than American Vanguard. However, Village Super Market is 1.26 times less risky than American Vanguard. It trades about 0.09 of its potential returns per unit of risk. American Vanguard is currently generating about 0.03 per unit of risk. If you would invest  2,963  in Village Super Market on October 27, 2024 and sell it today you would earn a total of  364.00  from holding Village Super Market or generate 12.28% return on investment over 90 days.

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

Village Super Market  vs.  American Vanguard

Village Super Market

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Village Super Market are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Village Super sustained solid returns over the last few months and may actually be approaching a breakup point.

American Vanguard

Risk-Adjusted Performance

2 of 100

Insignificant

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

Pair Trading with Village Super and American Vanguard

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

The idea behind Village Super Market and American Vanguard 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.