Correlation Between VivoPower International and Alger Mid

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

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

Diversification Opportunities for VivoPower International and Alger Mid

-0.41

Correlation Coefficient

VivoPower International  Alger Mid

Very good diversification

The 3 months correlation between VivoPower and Alger is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Alger Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Mid Cap and VivoPower International 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 VivoPower International PLC are associated (or correlated) with Alger Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Mid Cap has no effect on the direction of VivoPower International i.e., VivoPower International and Alger Mid go up and down completely randomly.

Pair Corralation between VivoPower International and Alger Mid

Given the investment horizon of 90 days VivoPower International is expected to generate 2.31 times less return on investment than Alger Mid. In addition to that, VivoPower International is 12.29 times more volatile than Alger Mid Cap. It trades about 0.01 of its total potential returns per unit of risk. Alger Mid Cap is currently generating about 0.35 per unit of volatility. If you would invest  1,101  in Alger Mid Cap on September 11, 2024 and sell it today you would earn a total of  298.00  from holding Alger Mid Cap or generate 27.07% return on investment over 90 days.

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

VivoPower International PLC  vs.  Alger Mid Cap

VivoPower International

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days VivoPower International PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, VivoPower International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Alger Mid Cap

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Alger Mid Cap are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Alger Mid showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VivoPower International and Alger Mid

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

The idea behind VivoPower International PLC and Alger Mid Cap 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..