Correlation Between VSE and TrueBlue

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

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

Diversification Opportunities for VSE and TrueBlue

-0.73

Correlation Coefficient

VSE  TrueBlue

Pay attention - limited upside

The 3 months correlation between VSE and TrueBlue is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding VSE Corp. and TrueBlue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TrueBlue and VSE 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 VSE Corporation are associated (or correlated) with TrueBlue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TrueBlue has no effect on the direction of VSE i.e., VSE and TrueBlue go up and down completely randomly.

Pair Corralation between VSE and TrueBlue

Given the investment horizon of 90 days VSE Corporation is expected to generate 0.82 times more return on investment than TrueBlue. However, VSE Corporation is 1.22 times less risky than TrueBlue. It trades about 0.08 of its potential returns per unit of risk. TrueBlue is currently generating about -0.13 per unit of risk. If you would invest  9,232  in VSE Corporation on January 9, 2025 and sell it today you would earn a total of  1,427  from holding VSE Corporation or generate 15.46% return on investment over 90 days.

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

VSE Corp.  vs.  TrueBlue

VSE Corporation

Risk-Adjusted Performance

Modest

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

TrueBlue

Risk-Adjusted Performance

Very Weak

Over the last 90 days TrueBlue has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in May 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with VSE and TrueBlue

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

The idea behind VSE Corporation and TrueBlue 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.