Correlation Between Vaalco Energy and IShares Core

Can any of the company-specific risk be diversified away by investing in both Vaalco Energy and IShares Core 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 Vaalco Energy and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vaalco Energy and iShares Core MSCI, you can compare the effects of market volatilities on Vaalco Energy and IShares Core 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 Vaalco Energy with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaalco Energy and IShares Core.

Diversification Opportunities for Vaalco Energy and IShares Core

0.74

Correlation Coefficient

Vaalco Energy  IShares Core

Poor diversification

The 3 months correlation between Vaalco and IShares is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Vaalco Energy and iShares Core MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core MSCI and Vaalco Energy 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 Vaalco Energy are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core MSCI has no effect on the direction of Vaalco Energy i.e., Vaalco Energy and IShares Core go up and down completely randomly.

Pair Corralation between Vaalco Energy and IShares Core

Considering the 90-day investment horizon Vaalco Energy is expected to generate 3.78 times more return on investment than IShares Core. However, Vaalco Energy is 3.78 times more volatile than iShares Core MSCI. It trades about 0.08 of its potential returns per unit of risk. iShares Core MSCI is currently generating about 0.23 per unit of risk. If you would invest  319.00  in Vaalco Energy on May 7, 2025 and sell it today you would earn a total of  40.00  from holding Vaalco Energy or generate 12.54% return on investment over 90 days.

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

Vaalco Energy  vs.  iShares Core MSCI

Vaalco Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vaalco Energy are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Vaalco Energy showed solid returns over the last few months and may actually be approaching a breakup point.

iShares Core MSCI

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core MSCI are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, IShares Core may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Vaalco Energy and IShares Core

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

The idea behind Vaalco Energy and iShares Core MSCI 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.