Correlation Between VivoPower International and China Changjiang

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

By analyzing existing cross correlation between VivoPower International PLC and China Changjiang Mining, you can compare the effects of market volatilities on VivoPower International and China Changjiang 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 VivoPower International with a short position of China Changjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of VivoPower International and China Changjiang.

Diversification Opportunities for VivoPower International and China Changjiang

0.0

Correlation Coefficient

VivoPower International  China Changjiang

Pay attention - limited upside

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

Pair Corralation between VivoPower International and China Changjiang

If you would invest  186.00  in VivoPower International PLC on September 5, 2024 and sell it today you would lose (49.00) from holding VivoPower International PLC or give up 26.34% of portfolio value over 90 days.

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

VivoPower International PLC  vs.  China Changjiang Mining

VivoPower International

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VivoPower International PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, VivoPower International reported solid returns over the last few months and may actually be approaching a breakup point.

China Changjiang Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Changjiang Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward-looking indicators, China Changjiang is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with VivoPower International and China Changjiang

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

The idea behind VivoPower International PLC and China Changjiang Mining 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.