Correlation Between Voice Mobility and Crescent Point

Can any of the company-specific risk be diversified away by investing in both Voice Mobility and Crescent Point 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 Voice Mobility and Crescent Point into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Voice Mobility International and Crescent Point Energy, you can compare the effects of market volatilities on Voice Mobility and Crescent Point 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 Voice Mobility with a short position of Crescent Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voice Mobility and Crescent Point.

Diversification Opportunities for Voice Mobility and Crescent Point

-0.29

Correlation Coefficient

Voice Mobility  Crescent Point

Very good diversification

The 3 months correlation between Voice and Crescent is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Voice Mobility International and Crescent Point Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent Point Energy and Voice Mobility 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 Voice Mobility International are associated (or correlated) with Crescent Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent Point Energy has no effect on the direction of Voice Mobility i.e., Voice Mobility and Crescent Point go up and down completely randomly.

Pair Corralation between Voice Mobility and Crescent Point

Assuming the 90 days trading horizon Voice Mobility International is expected to under-perform the Crescent Point. In addition to that, Voice Mobility is 2.32 times more volatile than Crescent Point Energy. It trades about -0.11 of its total potential returns per unit of risk. Crescent Point Energy is currently generating about 0.22 per unit of volatility. If you would invest  913.00  in Crescent Point Energy on February 1, 2024 and sell it today you would earn a total of  301.00  from holding Crescent Point Energy or generate 32.97% return on investment over 90 days.

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

Voice Mobility International  vs.  Crescent Point Energy

Voice Mobility Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voice Mobility International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical indicators, Voice Mobility is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Crescent Point Energy

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Crescent Point Energy are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Crescent Point displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Voice Mobility and Crescent Point

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

The idea behind Voice Mobility International and Crescent Point Energy 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.