Correlation Between Vista Outdoor and Minerva SA

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

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

Diversification Opportunities for Vista Outdoor and Minerva SA

0.0

Correlation Coefficient

Vista Outdoor  Minerva SA

Pay attention - limited upside

The 3 months correlation between Vista and Minerva is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vista Outdoor and Minerva SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerva SA and Vista Outdoor 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 Vista Outdoor are associated (or correlated) with Minerva SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerva SA has no effect on the direction of Vista Outdoor i.e., Vista Outdoor and Minerva SA go up and down completely randomly.

Pair Corralation between Vista Outdoor and Minerva SA

If you would invest  343.00  in Minerva SA on December 29, 2024 and sell it today you would earn a total of  137.00  from holding Minerva SA or generate 39.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Vista Outdoor  vs.  Minerva SA

Vista Outdoor

Risk-Adjusted Performance

Very Weak

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

Minerva SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Minerva SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Minerva SA showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vista Outdoor and Minerva SA

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

The idea behind Vista Outdoor and Minerva SA 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 Anywhere module to track or share privately all of your investments from the convenience of any device.