Correlation Between VS Media and Able View

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

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

Diversification Opportunities for VS Media and Able View

0.58

Correlation Coefficient

VS Media  Able View

Very weak diversification

The 3 months correlation between VSME and Able is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding VS Media Holdings and Able View Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Able View Global and VS Media 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 VS Media Holdings are associated (or correlated) with Able View. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Able View Global has no effect on the direction of VS Media i.e., VS Media and Able View go up and down completely randomly.

Pair Corralation between VS Media and Able View

Given the investment horizon of 90 days VS Media Holdings is expected to under-perform the Able View. But the stock apears to be less risky and, when comparing its historical volatility, VS Media Holdings is 2.55 times less risky than Able View. The stock trades about -0.02 of its potential returns per unit of risk. The Able View Global is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  5.00  in Able View Global on October 24, 2024 and sell it today you would lose (3.00) from holding Able View Global or give up 60.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	45.02%
Values	Daily Returns

VS Media Holdings  vs.  Able View Global

VS Media Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VS Media Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Able View Global

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Able View Global are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Able View showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VS Media and Able View

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

The idea behind VS Media Holdings and Able View Global 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.