Correlation Between Vision Marine and Carters

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

Diversification Opportunities for Vision Marine and Carters

0.71

Correlation Coefficient

Vision Marine  Carters

Poor diversification

The 3 months correlation between Vision and Carters is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Vision Marine Technologies and Carters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carters 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 Carters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carters has no effect on the direction of Vision Marine i.e., Vision Marine and Carters go up and down completely randomly.

Pair Corralation between Vision Marine and Carters

Given the investment horizon of 90 days Vision Marine Technologies is expected to under-perform the Carters. In addition to that, Vision Marine is 4.02 times more volatile than Carters. It trades about -0.19 of its total potential returns per unit of risk. Carters is currently generating about -0.04 per unit of volatility. If you would invest  7,134  in Carters on September 24, 2024 and sell it today you would lose (1,570) from holding Carters or give up 22.01% of portfolio value over 90 days.

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

Vision Marine Technologies  vs.  Carters

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 uncertain 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.

Carters

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carters has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Vision Marine and Carters

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

The idea behind Vision Marine Technologies and Carters 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.