Correlation Between Video River and Deere

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

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

Diversification Opportunities for Video River and Deere

-0.58

Correlation Coefficient

Video River  Deere

Excellent diversification

The 3 months correlation between Video and Deere is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Video River Networks and Deere Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deere Company and Video River 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 Video River Networks are associated (or correlated) with Deere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deere Company has no effect on the direction of Video River i.e., Video River and Deere go up and down completely randomly.

Pair Corralation between Video River and Deere

Given the investment horizon of 90 days Video River Networks is expected to generate 16.07 times more return on investment than Deere. However, Video River is 16.07 times more volatile than Deere Company. It trades about 0.06 of its potential returns per unit of risk. Deere Company is currently generating about 0.14 per unit of risk. If you would invest  0.65  in Video River Networks on September 12, 2024 and sell it today you would lose (0.35) from holding Video River Networks or give up 53.85% of portfolio value over 90 days.

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

Video River Networks  vs.  Deere Company

Video River Networks

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Video River Networks are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical indicators, Video River disclosed solid returns over the last few months and may actually be approaching a breakup point.

Deere Company

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deere Company are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Deere exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Video River and Deere

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

The idea behind Video River Networks and Deere Company 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.