Correlation Between Exor NV and Vicinity

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

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

Diversification Opportunities for Exor NV and Vicinity

0.78

Correlation Coefficient

Exor NV  Vicinity

Poor diversification

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

Pair Corralation between Exor NV and Vicinity

Assuming the 90 days horizon Exor NV is expected to generate 0.06 times more return on investment than Vicinity. However, Exor NV is 16.02 times less risky than Vicinity. It trades about -0.1 of its potential returns per unit of risk. Vicinity Motor Corp is currently generating about -0.13 per unit of risk. If you would invest  10,839  in Exor NV on September 15, 2024 and sell it today you would lose (962.00) from holding Exor NV or give up 8.88% of portfolio value over 90 days.

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

Exor NV  vs.  Vicinity Motor Corp

Exor NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exor NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Vicinity Motor Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vicinity Motor Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Exor NV and Vicinity

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

The idea behind Exor NV and Vicinity Motor Corp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.