Correlation Between Vimeo and Grab Holdings

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

By analyzing existing cross correlation between Vimeo Inc and Grab Holdings, you can compare the effects of market volatilities on Vimeo and Grab Holdings 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 Vimeo with a short position of Grab Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vimeo and Grab Holdings.

Diversification Opportunities for Vimeo and Grab Holdings

0.44

Correlation Coefficient

Vimeo  Grab Holdings

Very weak diversification

The 3 months correlation between Vimeo and Grab is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Vimeo Inc and Grab Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grab Holdings and Vimeo 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 Vimeo Inc are associated (or correlated) with Grab Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grab Holdings has no effect on the direction of Vimeo i.e., Vimeo and Grab Holdings go up and down completely randomly.

Pair Corralation between Vimeo and Grab Holdings

Given the investment horizon of 90 days Vimeo Inc is expected to generate 0.76 times more return on investment than Grab Holdings. However, Vimeo Inc is 1.32 times less risky than Grab Holdings. It trades about 0.04 of its potential returns per unit of risk. Grab Holdings is currently generating about -0.04 per unit of risk. If you would invest  644.00  in Vimeo Inc on November 19, 2024 and sell it today you would earn a total of  23.00  from holding Vimeo Inc or generate 3.57% return on investment over 90 days.

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

Vimeo Inc  vs.  Grab Holdings

Vimeo Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vimeo Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Vimeo is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Grab Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grab Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Vimeo and Grab Holdings

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

The idea behind Vimeo Inc and Grab Holdings 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.