Correlation Between VivoPower International and Wells Fargo

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

Diversification Opportunities for VivoPower International and Wells Fargo

-0.87

Correlation Coefficient

VivoPower International  Wells Fargo

Pay attention - limited upside

The 3 months correlation between VivoPower and Wells is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Wells Fargo Ultra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Ultra 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Ultra has no effect on the direction of VivoPower International i.e., VivoPower International and Wells Fargo go up and down completely randomly.

Pair Corralation between VivoPower International and Wells Fargo

Given the investment horizon of 90 days VivoPower International PLC is expected to generate 92.06 times more return on investment than Wells Fargo. However, VivoPower International is 92.06 times more volatile than Wells Fargo Ultra. It trades about 0.01 of its potential returns per unit of risk. Wells Fargo Ultra is currently generating about 0.26 per unit of risk. If you would invest  146.00  in VivoPower International PLC on December 22, 2024 and sell it today you would lose (17.00) from holding VivoPower International PLC or give up 11.64% of portfolio value over 90 days.

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

VivoPower International PLC  vs.  Wells Fargo Ultra

VivoPower International

Risk-Adjusted Performance

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 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Wells Fargo Ultra

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wells Fargo Ultra are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Wells Fargo is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with VivoPower International and Wells Fargo

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

The idea behind VivoPower International PLC and Wells Fargo Ultra 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.