Correlation Between VSE and Planet Image

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

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

Diversification Opportunities for VSE and Planet Image

-0.72

Correlation Coefficient

VSE  Planet Image

Pay attention - limited upside

The 3 months correlation between VSE and Planet is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding VSE Corp. and Planet Image International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Image Interna 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 Planet Image. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Image Interna has no effect on the direction of VSE i.e., VSE and Planet Image go up and down completely randomly.

Pair Corralation between VSE and Planet Image

Given the investment horizon of 90 days VSE Corporation is expected to generate 0.74 times more return on investment than Planet Image. However, VSE Corporation is 1.35 times less risky than Planet Image. It trades about -0.07 of its potential returns per unit of risk. Planet Image International is currently generating about -0.25 per unit of risk. If you would invest  11,397  in VSE Corporation on January 9, 2025 and sell it today you would lose (738.00) from holding VSE Corporation or give up 6.48% of portfolio value over 90 days.

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

VSE Corp.  vs.  Planet Image International

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.

Planet Image Interna

Risk-Adjusted Performance

Very Weak

Over the last 90 days Planet Image International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental drivers remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with VSE and Planet Image

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

The idea behind VSE Corporation and Planet Image International 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.