Correlation Between CurrentC Power and VTEX

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

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

Diversification Opportunities for CurrentC Power and VTEX

-0.23

Correlation Coefficient

CurrentC Power  VTEX

Very good diversification

The 3 months correlation between CurrentC and VTEX is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding CurrentC Power and VTEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VTEX and CurrentC Power 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 CurrentC Power are associated (or correlated) with VTEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VTEX has no effect on the direction of CurrentC Power i.e., CurrentC Power and VTEX go up and down completely randomly.

Pair Corralation between CurrentC Power and VTEX

Given the investment horizon of 90 days CurrentC Power is expected to generate 13.62 times more return on investment than VTEX. However, CurrentC Power is 13.62 times more volatile than VTEX. It trades about 0.11 of its potential returns per unit of risk. VTEX is currently generating about -0.05 per unit of risk. If you would invest  12.00  in CurrentC Power on August 31, 2024 and sell it today you would earn a total of  0.00  from holding CurrentC Power or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

CurrentC Power  vs.  VTEX

CurrentC Power

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CurrentC Power are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, CurrentC Power showed solid returns over the last few months and may actually be approaching a breakup point.

VTEX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VTEX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, VTEX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CurrentC Power and VTEX

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

The idea behind CurrentC Power and VTEX 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.