Correlation Between VOGO SA and BIO UV

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

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

Diversification Opportunities for VOGO SA and BIO UV

-0.24

Correlation Coefficient

VOGO SA  BIO UV

Very good diversification

The 3 months correlation between VOGO and BIO is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding VOGO SA and BIO UV Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIO UV Group and VOGO SA 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 VOGO SA are associated (or correlated) with BIO UV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIO UV Group has no effect on the direction of VOGO SA i.e., VOGO SA and BIO UV go up and down completely randomly.

Pair Corralation between VOGO SA and BIO UV

Assuming the 90 days trading horizon VOGO SA is expected to under-perform the BIO UV. But the stock apears to be less risky and, when comparing its historical volatility, VOGO SA is 1.63 times less risky than BIO UV. The stock trades about -0.09 of its potential returns per unit of risk. The BIO UV Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  198.00  in BIO UV Group on September 29, 2024 and sell it today you would earn a total of  17.00  from holding BIO UV Group or generate 8.59% return on investment over 90 days.

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

VOGO SA  vs.  BIO UV Group

VOGO SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VOGO SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak 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.

BIO UV Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BIO UV Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, BIO UV may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with VOGO SA and BIO UV

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

The idea behind VOGO SA and BIO UV Group 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.