Correlation Between VivoPower International and T Rowe

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

Diversification Opportunities for VivoPower International and T Rowe

-0.74

Correlation Coefficient

VivoPower International  T Rowe

Pay attention - limited upside

The 3 months correlation between VivoPower and PRGTX is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price 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 T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of VivoPower International i.e., VivoPower International and T Rowe go up and down completely randomly.

Pair Corralation between VivoPower International and T Rowe

Given the investment horizon of 90 days VivoPower International PLC is expected to generate 15.74 times more return on investment than T Rowe. However, VivoPower International is 15.74 times more volatile than T Rowe Price. It trades about 0.16 of its potential returns per unit of risk. T Rowe Price is currently generating about 0.05 per unit of risk. If you would invest  83.00  in VivoPower International PLC on August 31, 2024 and sell it today you would earn a total of  33.00  from holding VivoPower International PLC or generate 39.76% return on investment over 90 days.

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

VivoPower International PLC  vs.  T Rowe Price

VivoPower International

Risk-Adjusted Performance

0 of 100

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 relatively invariable basic indicators, VivoPower International is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

T Rowe Price

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, T Rowe may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with VivoPower International and T Rowe

The main advantage of trading using opposite VivoPower International and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VivoPower International position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe's long position.

The idea behind VivoPower International PLC and T Rowe Price 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.