Correlation Between VivoPower International and Duff Phelps

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

Diversification Opportunities for VivoPower International and Duff Phelps

-0.12

Correlation Coefficient

VivoPower International  Duff Phelps

Good diversification

The 3 months correlation between VivoPower and Duff is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Duff Phelps Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duff Phelps Global 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 Duff Phelps. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duff Phelps Global has no effect on the direction of VivoPower International i.e., VivoPower International and Duff Phelps go up and down completely randomly.

Pair Corralation between VivoPower International and Duff Phelps

Given the investment horizon of 90 days VivoPower International PLC is expected to generate 15.27 times more return on investment than Duff Phelps. However, VivoPower International is 15.27 times more volatile than Duff Phelps Global. It trades about 0.04 of its potential returns per unit of risk. Duff Phelps Global is currently generating about 0.01 per unit of risk. If you would invest  350.00  in VivoPower International PLC on October 12, 2024 and sell it today you would lose (202.00) from holding VivoPower International PLC or give up 57.71% of portfolio value over 90 days.

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

VivoPower International PLC  vs.  Duff Phelps Global

VivoPower International

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VivoPower International PLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, VivoPower International reported solid returns over the last few months and may actually be approaching a breakup point.

Duff Phelps Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duff Phelps Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Duff Phelps 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 Duff Phelps

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

The idea behind VivoPower International PLC and Duff Phelps Global 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 Anywhere module to track or share privately all of your investments from the convenience of any device.