Correlation Between VivoPower International and Software And

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

Diversification Opportunities for VivoPower International and Software And

-0.59

Correlation Coefficient

VivoPower International  Software And

Excellent diversification

The 3 months correlation between VivoPower and Software is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Software And It in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Software And It 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 Software And. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Software And It has no effect on the direction of VivoPower International i.e., VivoPower International and Software And go up and down completely randomly.

Pair Corralation between VivoPower International and Software And

Given the investment horizon of 90 days VivoPower International PLC is expected to under-perform the Software And. In addition to that, VivoPower International is 4.89 times more volatile than Software And It. It trades about -0.25 of its total potential returns per unit of risk. Software And It is currently generating about -0.15 per unit of volatility. If you would invest  2,792  in Software And It on February 7, 2024 and sell it today you would lose (123.00) from holding Software And It or give up 4.41% of portfolio value over 90 days.

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

VivoPower International PLC  vs.  Software And It

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 unfluctuating basic indicators, VivoPower International reported solid returns over the last few months and may actually be approaching a breakup point.

Software And It

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Software And It has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with VivoPower International and Software And

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

The idea behind VivoPower International PLC and Software And It 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..