Correlation Between VCI Global and Transportation Portfolio

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

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

Diversification Opportunities for VCI Global and Transportation Portfolio

-0.86

Correlation Coefficient

VCI Global  Transportation Portfolio

Pay attention - limited upside

The 3 months correlation between VCI and Transportation is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding VCI Global Limited and Transportation Portfolio Trans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportation Portfolio and VCI Global 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 VCI Global Limited are associated (or correlated) with Transportation Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportation Portfolio has no effect on the direction of VCI Global i.e., VCI Global and Transportation Portfolio go up and down completely randomly.

Pair Corralation between VCI Global and Transportation Portfolio

Given the investment horizon of 90 days VCI Global Limited is expected to generate 16.59 times more return on investment than Transportation Portfolio. However, VCI Global is 16.59 times more volatile than Transportation Portfolio Transportation. It trades about 0.03 of its potential returns per unit of risk. Transportation Portfolio Transportation is currently generating about 0.15 per unit of risk. If you would invest  696.00  in VCI Global Limited on August 31, 2024 and sell it today you would lose (257.00) from holding VCI Global Limited or give up 36.93% of portfolio value over 90 days.

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

VCI Global Limited  vs.  Transportation Portfolio Trans

VCI Global Limited

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VCI Global Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent forward indicators, VCI Global reported solid returns over the last few months and may actually be approaching a breakup point.

Transportation Portfolio

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Transportation Portfolio Transportation are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Transportation Portfolio may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with VCI Global and Transportation Portfolio

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

The idea behind VCI Global Limited and Transportation Portfolio Transportation 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.