Correlation Between Vista Land and First Abacus

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

By analyzing existing cross correlation between Vista Land Lifescapes and First Abacus Financial, you can compare the effects of market volatilities on Vista Land and First Abacus 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 Vista Land with a short position of First Abacus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Land and First Abacus.

Diversification Opportunities for Vista Land and First Abacus

-0.15

Correlation Coefficient

Vista Land  First Abacus

Good diversification

The 3 months correlation between Vista and First is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Vista Land Lifescapes and First Abacus Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Abacus Financial and Vista Land 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 Vista Land Lifescapes are associated (or correlated) with First Abacus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Abacus Financial has no effect on the direction of Vista Land i.e., Vista Land and First Abacus go up and down completely randomly.

Pair Corralation between Vista Land and First Abacus

Assuming the 90 days trading horizon Vista Land is expected to generate 6.71 times less return on investment than First Abacus. But when comparing it to its historical volatility, Vista Land Lifescapes is 6.06 times less risky than First Abacus. It trades about 0.04 of its potential returns per unit of risk. First Abacus Financial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  60.00  in First Abacus Financial on October 8, 2024 and sell it today you would earn a total of  2.00  from holding First Abacus Financial or generate 3.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.89%
Values	Daily Returns

Vista Land Lifescapes  vs.  First Abacus Financial

Vista Land Lifescapes

Risk-Adjusted Performance

0 of 100

Weak

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

First Abacus Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Abacus Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Vista Land and First Abacus

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

The idea behind Vista Land Lifescapes and First Abacus Financial 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.