Correlation Between VivoPower International and Upright Growth

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

Diversification Opportunities for VivoPower International and Upright Growth

0.49

Correlation Coefficient

VivoPower International  Upright Growth

Very weak diversification

The 3 months correlation between VivoPower and Upright is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Upright Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upright Growth 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 Upright Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upright Growth has no effect on the direction of VivoPower International i.e., VivoPower International and Upright Growth go up and down completely randomly.

Pair Corralation between VivoPower International and Upright Growth

Given the investment horizon of 90 days VivoPower International PLC is expected to generate 7.56 times more return on investment than Upright Growth. However, VivoPower International is 7.56 times more volatile than Upright Growth Fund. It trades about 0.09 of its potential returns per unit of risk. Upright Growth Fund is currently generating about 0.14 per unit of risk. If you would invest  114.00  in VivoPower International PLC on September 26, 2024 and sell it today you would earn a total of  32.00  from holding VivoPower International PLC or generate 28.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

VivoPower International PLC  vs.  Upright Growth Fund

VivoPower International

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VivoPower International PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, VivoPower International reported solid returns over the last few months and may actually be approaching a breakup point.

Upright Growth

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Upright Growth Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Upright Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VivoPower International and Upright Growth

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

The idea behind VivoPower International PLC and Upright Growth Fund 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.