Correlation Between VivoPower International and Technology Munications

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

Diversification Opportunities for VivoPower International and Technology Munications

-0.76

Correlation Coefficient

VivoPower International  Technology Munications

Pay attention - limited upside

The 3 months correlation between VivoPower and Technology is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Technology Munications Portfol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technology Munications 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 Technology Munications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technology Munications has no effect on the direction of VivoPower International i.e., VivoPower International and Technology Munications go up and down completely randomly.

Pair Corralation between VivoPower International and Technology Munications

Given the investment horizon of 90 days VivoPower International is expected to generate 2.06 times less return on investment than Technology Munications. In addition to that, VivoPower International is 12.98 times more volatile than Technology Munications Portfolio. It trades about 0.01 of its total potential returns per unit of risk. Technology Munications Portfolio is currently generating about 0.16 per unit of volatility. If you would invest  1,312  in Technology Munications Portfolio on September 3, 2024 and sell it today you would earn a total of  138.00  from holding Technology Munications Portfolio or generate 10.52% 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.  Technology Munications Portfol

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 current stock price agitation, may contribute to short-term losses for the retail investors.

Technology Munications

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Technology Munications Portfolio are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Technology Munications may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with VivoPower International and Technology Munications

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

The idea behind VivoPower International PLC and Technology Munications Portfolio 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.