Correlation Between Vision Marine and Curtiss Motorcycles

Can any of the company-specific risk be diversified away by investing in both Vision Marine and Curtiss Motorcycles 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 Vision Marine and Curtiss Motorcycles into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Vision Marine and Curtiss Motorcycles

-0.2

Correlation Coefficient

Vision Marine  Curtiss Motorcycles

Good diversification

The 3 months correlation between Vision and Curtiss is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Vision Marine Technologies and Curtiss Motorcycles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Motorcycles and Vision Marine 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 Vision Marine Technologies are associated (or correlated) with Curtiss Motorcycles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curtiss Motorcycles has no effect on the direction of Vision Marine i.e., Vision Marine and Curtiss Motorcycles go up and down completely randomly.

Pair Corralation between Vision Marine and Curtiss Motorcycles

Given the investment horizon of 90 days Vision Marine Technologies is expected to under-perform the Curtiss Motorcycles. But the stock apears to be less risky and, when comparing its historical volatility, Vision Marine Technologies is 12.95 times less risky than Curtiss Motorcycles. The stock trades about -0.27 of its potential returns per unit of risk. The Curtiss Motorcycles is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  7.20  in Curtiss Motorcycles on September 29, 2024 and sell it today you would lose (3.60) from holding Curtiss Motorcycles or give up 50.0% of portfolio value over 90 days.

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

Vision Marine Technologies  vs.  Curtiss Motorcycles

Vision Marine Techno

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vision Marine Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Curtiss Motorcycles

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Curtiss Motorcycles are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Curtiss Motorcycles unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vision Marine and Curtiss Motorcycles

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

The idea behind Vision Marine Technologies and Curtiss Motorcycles 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.