Correlation Between Equifax and VCI Global

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

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

Diversification Opportunities for Equifax and VCI Global

0.88

Correlation Coefficient

Equifax  VCI Global

Very poor diversification

The 3 months correlation between Equifax and VCI is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Equifax and VCI Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VCI Global Limited and Equifax 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 Equifax are associated (or correlated) with VCI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VCI Global Limited has no effect on the direction of Equifax i.e., Equifax and VCI Global go up and down completely randomly.

Pair Corralation between Equifax and VCI Global

Considering the 90-day investment horizon Equifax is expected to under-perform the VCI Global. But the stock apears to be less risky and, when comparing its historical volatility, Equifax is 12.5 times less risky than VCI Global. The stock trades about -0.15 of its potential returns per unit of risk. The VCI Global Limited is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  696.00  in VCI Global Limited on September 3, 2024 and sell it today you would lose (378.00) from holding VCI Global Limited or give up 54.31% of portfolio value over 90 days.

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

Equifax  vs.  VCI Global Limited

Equifax

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Equifax has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

VCI Global Limited

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days VCI Global Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, VCI Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Equifax and VCI Global

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

The idea behind Equifax and VCI Global Limited 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.