Correlation Between Vision Marine and On Holding

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

By analyzing existing cross correlation between Vision Marine Technologies and On Holding, you can compare the effects of market volatilities on Vision Marine and On Holding 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 Vision Marine with a short position of On Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vision Marine and On Holding.

Diversification Opportunities for Vision Marine and On Holding

-0.58

Correlation Coefficient

Vision Marine  On Holding

Excellent diversification

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

Pair Corralation between Vision Marine and On Holding

Given the investment horizon of 90 days Vision Marine Technologies is expected to under-perform the On Holding. In addition to that, Vision Marine is 4.83 times more volatile than On Holding. It trades about -0.25 of its total potential returns per unit of risk. On Holding is currently generating about 0.19 per unit of volatility. If you would invest  4,570  in On Holding on September 4, 2024 and sell it today you would earn a total of  1,283  from holding On Holding or generate 28.07% return on investment over 90 days.

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

Vision Marine Technologies  vs.  On Holding

Vision Marine Techno

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vision Marine Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

On Holding

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in On Holding are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, On Holding displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vision Marine and On Holding

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

The idea behind Vision Marine Technologies and On Holding 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..