Correlation Between VivoPower International and Entergy New

Can any of the company-specific risk be diversified away by investing in both VivoPower International and Entergy New 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 Entergy New 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 Entergy New Orleans, you can compare the effects of market volatilities on VivoPower International and Entergy New 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 Entergy New. Check out your portfolio center. Please also check ongoing floating volatility patterns of VivoPower International and Entergy New.

Diversification Opportunities for VivoPower International and Entergy New

-0.12

Correlation Coefficient

VivoPower International  Entergy New

Good diversification

The 3 months correlation between VivoPower and Entergy is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Entergy New Orleans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entergy New Orleans 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 Entergy New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entergy New Orleans has no effect on the direction of VivoPower International i.e., VivoPower International and Entergy New go up and down completely randomly.

Pair Corralation between VivoPower International and Entergy New

Given the investment horizon of 90 days VivoPower International PLC is expected to under-perform the Entergy New. In addition to that, VivoPower International is 7.13 times more volatile than Entergy New Orleans. It trades about -0.09 of its total potential returns per unit of risk. Entergy New Orleans is currently generating about -0.11 per unit of volatility. If you would invest  2,274  in Entergy New Orleans on November 27, 2024 and sell it today you would lose (138.00) from holding Entergy New Orleans or give up 6.07% of portfolio value over 90 days.

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

VivoPower International PLC  vs.  Entergy New Orleans

VivoPower International

Risk-Adjusted Performance

Very Weak

Over the last 90 days VivoPower International PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Entergy New Orleans

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entergy New Orleans has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Pair Trading with VivoPower International and Entergy New

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

The idea behind VivoPower International PLC and Entergy New Orleans 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.