Correlation Between Viva Leisure and Kip McGrath

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

By analyzing existing cross correlation between Viva Leisure and Kip McGrath Education, you can compare the effects of market volatilities on Viva Leisure and Kip McGrath 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 Viva Leisure with a short position of Kip McGrath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viva Leisure and Kip McGrath.

Diversification Opportunities for Viva Leisure and Kip McGrath

0.32

Correlation Coefficient

Viva Leisure  Kip McGrath

Weak diversification

The 3 months correlation between Viva and Kip is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Viva Leisure and Kip McGrath Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kip McGrath Education and Viva Leisure 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 Viva Leisure are associated (or correlated) with Kip McGrath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kip McGrath Education has no effect on the direction of Viva Leisure i.e., Viva Leisure and Kip McGrath go up and down completely randomly.

Pair Corralation between Viva Leisure and Kip McGrath

Assuming the 90 days trading horizon Viva Leisure is expected to generate 0.59 times more return on investment than Kip McGrath. However, Viva Leisure is 1.69 times less risky than Kip McGrath. It trades about 0.04 of its potential returns per unit of risk. Kip McGrath Education is currently generating about -0.01 per unit of risk. If you would invest  108.00  in Viva Leisure on October 10, 2024 and sell it today you would earn a total of  36.00  from holding Viva Leisure or generate 33.33% return on investment over 90 days.

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

Viva Leisure  vs.  Kip McGrath Education

Viva Leisure

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Viva Leisure are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Viva Leisure may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kip McGrath Education

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kip McGrath Education are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Kip McGrath unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Viva Leisure and Kip McGrath

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

The idea behind Viva Leisure and Kip McGrath Education 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.