Correlation Between Westell Technologies and VivoPower International

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

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

Diversification Opportunities for Westell Technologies and VivoPower International

-0.78

Correlation Coefficient

Westell Technologies  VivoPower International

Pay attention - limited upside

The 3 months correlation between Westell and VivoPower is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Westell Technologies and VivoPower International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VivoPower International and Westell Technologies 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 Westell Technologies are associated (or correlated) with VivoPower International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VivoPower International has no effect on the direction of Westell Technologies i.e., Westell Technologies and VivoPower International go up and down completely randomly.

Pair Corralation between Westell Technologies and VivoPower International

If you would invest  140.00  in Westell Technologies on July 18, 2024 and sell it today you would earn a total of  0.00  from holding Westell Technologies or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Westell Technologies  vs.  VivoPower International PLC

Westell Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Westell Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Westell Technologies is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

VivoPower International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VivoPower International PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in November 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Westell Technologies and VivoPower International

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

The idea behind Westell Technologies and VivoPower International PLC 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.

Check out your portfolio center.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.