Correlation Between Village Super and Cheetah Net

Can any of the company-specific risk be diversified away by investing in both Village Super and Cheetah Net 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 Cheetah Net 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 Cheetah Net Supply, you can compare the effects of market volatilities on Village Super and Cheetah Net 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 Cheetah Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Super and Cheetah Net.

Diversification Opportunities for Village Super and Cheetah Net

-0.27

Correlation Coefficient

Village Super  Cheetah Net

Very good diversification

The 3 months correlation between Village and Cheetah is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Village Super Market and Cheetah Net Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheetah Net Supply 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 Cheetah Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheetah Net Supply has no effect on the direction of Village Super i.e., Village Super and Cheetah Net go up and down completely randomly.

Pair Corralation between Village Super and Cheetah Net

Assuming the 90 days horizon Village Super is expected to generate 7.09 times less return on investment than Cheetah Net. But when comparing it to its historical volatility, Village Super Market is 8.98 times less risky than Cheetah Net. It trades about 0.06 of its potential returns per unit of risk. Cheetah Net Supply is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  346.00  in Cheetah Net Supply on October 12, 2024 and sell it today you would lose (58.00) from holding Cheetah Net Supply or give up 16.76% of portfolio value over 90 days.

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

Village Super Market  vs.  Cheetah Net Supply

Village Super Market

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Village Super Market are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Village Super may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Cheetah Net Supply

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cheetah Net Supply are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Cheetah Net unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Village Super and Cheetah Net

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

The idea behind Village Super Market and Cheetah Net Supply 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.