Correlation Between Vast Renewables and Steel Partners

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

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

Diversification Opportunities for Vast Renewables and Steel Partners

-0.27

Correlation Coefficient

Vast Renewables  Steel Partners

Very good diversification

The 3 months correlation between Vast and Steel is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Vast Renewables Limited and Steel Partners Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Partners Holdings and Vast Renewables 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 Vast Renewables Limited are associated (or correlated) with Steel Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Partners Holdings has no effect on the direction of Vast Renewables i.e., Vast Renewables and Steel Partners go up and down completely randomly.

Pair Corralation between Vast Renewables and Steel Partners

Given the investment horizon of 90 days Vast Renewables Limited is expected to generate 8.46 times more return on investment than Steel Partners. However, Vast Renewables is 8.46 times more volatile than Steel Partners Holdings. It trades about 0.06 of its potential returns per unit of risk. Steel Partners Holdings is currently generating about 0.05 per unit of risk. If you would invest  190.00  in Vast Renewables Limited on September 21, 2024 and sell it today you would lose (62.00) from holding Vast Renewables Limited or give up 32.63% of portfolio value over 90 days.

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

Vast Renewables Limited  vs.  Steel Partners Holdings

Vast Renewables

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vast Renewables Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Vast Renewables exhibited solid returns over the last few months and may actually be approaching a breakup point.

Steel Partners Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Steel Partners Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable essential indicators, Steel Partners is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Vast Renewables and Steel Partners

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

The idea behind Vast Renewables Limited and Steel Partners 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.