Correlation Between Vincom Retail and Atesco Industrial

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

By analyzing existing cross correlation between Vincom Retail JSC and Atesco Industrial Cartering, you can compare the effects of market volatilities on Vincom Retail and Atesco Industrial 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 Vincom Retail with a short position of Atesco Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vincom Retail and Atesco Industrial.

Diversification Opportunities for Vincom Retail and Atesco Industrial

0.36

Correlation Coefficient

Vincom Retail  Atesco Industrial

Weak diversification

The 3 months correlation between Vincom and Atesco is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Vincom Retail JSC and Atesco Industrial Cartering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atesco Industrial and Vincom Retail 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 Vincom Retail JSC are associated (or correlated) with Atesco Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atesco Industrial has no effect on the direction of Vincom Retail i.e., Vincom Retail and Atesco Industrial go up and down completely randomly.

Pair Corralation between Vincom Retail and Atesco Industrial

Assuming the 90 days trading horizon Vincom Retail is expected to generate 8.34 times less return on investment than Atesco Industrial. But when comparing it to its historical volatility, Vincom Retail JSC is 3.68 times less risky than Atesco Industrial. It trades about 0.3 of its potential returns per unit of risk. Atesco Industrial Cartering is currently generating about 0.69 of returns per unit of risk over similar time horizon. If you would invest  1,150,000  in Atesco Industrial Cartering on December 5, 2024 and sell it today you would earn a total of  840,000  from holding Atesco Industrial Cartering or generate 73.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	81.82%
Values	Daily Returns

Vincom Retail JSC  vs.  Atesco Industrial Cartering

Vincom Retail JSC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vincom Retail JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Vincom Retail is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Atesco Industrial

Risk-Adjusted Performance

Good

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

Pair Trading with Vincom Retail and Atesco Industrial

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

The idea behind Vincom Retail JSC and Atesco Industrial Cartering 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.