Correlation Between Vision Marine and LCI Industries

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

Diversification Opportunities for Vision Marine and LCI Industries

0.35

Correlation Coefficient

Vision Marine  LCI Industries

Weak diversification

The 3 months correlation between Vision and LCI is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Vision Marine Technologies and LCI Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LCI Industries 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 LCI Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LCI Industries has no effect on the direction of Vision Marine i.e., Vision Marine and LCI Industries go up and down completely randomly.

Pair Corralation between Vision Marine and LCI Industries

Given the investment horizon of 90 days Vision Marine Technologies is expected to under-perform the LCI Industries. In addition to that, Vision Marine is 3.79 times more volatile than LCI Industries. It trades about -0.27 of its total potential returns per unit of risk. LCI Industries is currently generating about 0.02 per unit of volatility. If you would invest  9,974  in LCI Industries on September 29, 2024 and sell it today you would earn a total of  295.00  from holding LCI Industries or generate 2.96% return on investment over 90 days.

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

Vision Marine Technologies  vs.  LCI Industries

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.

LCI Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LCI Industries 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 forward 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 LCI Industries

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

The idea behind Vision Marine Technologies and LCI Industries 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.