Correlation Between VivoPower International and Ivy Science

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

Diversification Opportunities for VivoPower International and Ivy Science

-0.64

Correlation Coefficient

VivoPower International  Ivy Science

Excellent diversification

The 3 months correlation between VivoPower and Ivy is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Ivy Science And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Science And 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 Ivy Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Science And has no effect on the direction of VivoPower International i.e., VivoPower International and Ivy Science go up and down completely randomly.

Pair Corralation between VivoPower International and Ivy Science

Given the investment horizon of 90 days VivoPower International PLC is expected to generate 10.32 times more return on investment than Ivy Science. However, VivoPower International is 10.32 times more volatile than Ivy Science And. It trades about 0.04 of its potential returns per unit of risk. Ivy Science And is currently generating about 0.05 per unit of risk. If you would invest  240.00  in VivoPower International PLC on September 24, 2024 and sell it today you would lose (99.00) from holding VivoPower International PLC or give up 41.25% of portfolio value over 90 days.

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

VivoPower International PLC  vs.  Ivy Science And

VivoPower International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VivoPower International PLC are ranked lower than 4 (%) 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.

Ivy Science And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ivy Science And has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with VivoPower International and Ivy Science

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

The idea behind VivoPower International PLC and Ivy Science And 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.