Correlation Between VivoPower International and Defiance

Can any of the company-specific risk be diversified away by investing in both VivoPower International and Defiance 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 Defiance 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 Defiance SP 500, you can compare the effects of market volatilities on VivoPower International and Defiance 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 Defiance. Check out your portfolio center. Please also check ongoing floating volatility patterns of VivoPower International and Defiance.

Diversification Opportunities for VivoPower International and Defiance

-0.13

Correlation Coefficient

VivoPower International  Defiance

Good diversification

The 3 months correlation between VivoPower and Defiance is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Defiance SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance SP 500 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 Defiance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance SP 500 has no effect on the direction of VivoPower International i.e., VivoPower International and Defiance go up and down completely randomly.

Pair Corralation between VivoPower International and Defiance

Given the investment horizon of 90 days VivoPower International PLC is expected to under-perform the Defiance. In addition to that, VivoPower International is 13.51 times more volatile than Defiance SP 500. It trades about -0.02 of its total potential returns per unit of risk. Defiance SP 500 is currently generating about 0.1 per unit of volatility. If you would invest  3,211  in Defiance SP 500 on July 24, 2025 and sell it today you would earn a total of  109.00  from holding Defiance SP 500 or generate 3.39% return on investment over 90 days.

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

VivoPower International PLC  vs.  Defiance SP 500

VivoPower International

Risk-Adjusted Performance

Weakest

Over the last 90 days VivoPower International PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Defiance SP 500

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Defiance SP 500 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Defiance is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with VivoPower International and Defiance

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

The idea behind VivoPower International PLC and Defiance SP 500 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.