Correlation Between VOXX International and GoPro
Can any of the company-specific risk be diversified away by investing in both VOXX International and GoPro 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 VOXX International and GoPro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VOXX International and GoPro Inc, you can compare the effects of market volatilities on VOXX International and GoPro 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 VOXX International with a short position of GoPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of VOXX International and GoPro.
Diversification Opportunities for VOXX International and GoPro
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VOXX and GoPro is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding VOXX International and GoPro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoPro Inc and VOXX 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 VOXX International are associated (or correlated) with GoPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoPro Inc has no effect on the direction of VOXX International i.e., VOXX International and GoPro go up and down completely randomly.
Pair Corralation between VOXX International and GoPro
Given the investment horizon of 90 days VOXX International is expected to under-perform the GoPro. In addition to that, VOXX International is 1.25 times more volatile than GoPro Inc. It trades about -0.41 of its total potential returns per unit of risk. GoPro Inc is currently generating about -0.43 per unit of volatility. If you would invest 225.00 in GoPro Inc on February 1, 2024 and sell it today you would lose (52.00) from holding GoPro Inc or give up 23.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
VOXX International vs. GoPro Inc
Performance |
Timeline |
VOXX International |
GoPro Inc |
VOXX International and GoPro Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with VOXX International and GoPro
The main advantage of trading using opposite VOXX International and GoPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VOXX International position performs unexpectedly, GoPro 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 GoPro will offset losses from the drop in GoPro's long position.VOXX International vs. LG Display Co | VOXX International vs. Vizio Holding Corp | VOXX International vs. Turtle Beach Corp | VOXX International vs. Emerson Radio |
GoPro vs. Sony Group Corp | GoPro vs. LG Display Co | GoPro vs. Vizio Holding Corp | GoPro vs. Universal Electronics |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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