Correlation Between VSE and Dun Bradstreet

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

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

Diversification Opportunities for VSE and Dun Bradstreet

0.2

Correlation Coefficient

VSE  Dun Bradstreet

Modest diversification

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

Pair Corralation between VSE and Dun Bradstreet

Given the investment horizon of 90 days VSE Corporation is expected to generate 1.59 times more return on investment than Dun Bradstreet. However, VSE is 1.59 times more volatile than Dun Bradstreet Holdings. It trades about 0.02 of its potential returns per unit of risk. Dun Bradstreet Holdings is currently generating about -0.25 per unit of risk. If you would invest  11,670  in VSE Corporation on December 1, 2024 and sell it today you would earn a total of  180.00  from holding VSE Corporation or generate 1.54% return on investment over 90 days.

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

VSE Corp.  vs.  Dun Bradstreet Holdings

VSE Corporation

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VSE Corporation are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, VSE is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Dun Bradstreet Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dun Bradstreet Holdings 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 somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with VSE and Dun Bradstreet

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

The idea behind VSE Corporation and Dun Bradstreet 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.