Correlation Between Vacasa and Banzai International

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

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

Diversification Opportunities for Vacasa and Banzai International

-0.43

Correlation Coefficient

Vacasa  Banzai International

Very good diversification

The 3 months correlation between Vacasa and Banzai is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Vacasa Inc and Banzai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banzai International and Vacasa 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 Vacasa Inc are associated (or correlated) with Banzai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banzai International has no effect on the direction of Vacasa i.e., Vacasa and Banzai International go up and down completely randomly.

Pair Corralation between Vacasa and Banzai International

Given the investment horizon of 90 days Vacasa Inc is expected to generate 0.32 times more return on investment than Banzai International. However, Vacasa Inc is 3.1 times less risky than Banzai International. It trades about 0.01 of its potential returns per unit of risk. Banzai International is currently generating about -0.01 per unit of risk. If you would invest  364.00  in Vacasa Inc on September 22, 2024 and sell it today you would lose (30.00) from holding Vacasa Inc or give up 8.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Vacasa Inc  vs.  Banzai International

Vacasa Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vacasa Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Vacasa is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Banzai International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banzai International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Vacasa and Banzai International

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

The idea behind Vacasa Inc and Banzai International 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.