Correlation Between Vontier Corp and Sobr Safe

Can any of the company-specific risk be diversified away by investing in both Vontier Corp and Sobr Safe 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 Vontier Corp and Sobr Safe into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vontier Corp and Sobr Safe, you can compare the effects of market volatilities on Vontier Corp and Sobr Safe 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 Vontier Corp with a short position of Sobr Safe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vontier Corp and Sobr Safe.

Diversification Opportunities for Vontier Corp and Sobr Safe

-0.65

Correlation Coefficient

Vontier Corp  Sobr Safe

Excellent diversification

The 3 months correlation between Vontier and Sobr is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Vontier Corp and Sobr Safe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sobr Safe and Vontier Corp 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 Vontier Corp are associated (or correlated) with Sobr Safe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sobr Safe has no effect on the direction of Vontier Corp i.e., Vontier Corp and Sobr Safe go up and down completely randomly.

Pair Corralation between Vontier Corp and Sobr Safe

Considering the 90-day investment horizon Vontier Corp is expected to generate 0.1 times more return on investment than Sobr Safe. However, Vontier Corp is 9.72 times less risky than Sobr Safe. It trades about 0.0 of its potential returns per unit of risk. Sobr Safe is currently generating about -0.04 per unit of risk. If you would invest  3,941  in Vontier Corp on August 26, 2024 and sell it today you would lose (57.00) from holding Vontier Corp or give up 1.45% of portfolio value over 90 days.

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

Vontier Corp  vs.  Sobr Safe

Vontier Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vontier Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Vontier Corp may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Sobr Safe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sobr Safe has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Sobr Safe is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Vontier Corp and Sobr Safe

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

The idea behind Vontier Corp and Sobr Safe 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.