Correlation Between VivoPower International and Blackrock Science

Can any of the company-specific risk be diversified away by investing in both VivoPower International and Blackrock Science 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 Blackrock Science 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 Blackrock Science Technology, you can compare the effects of market volatilities on VivoPower International and Blackrock Science 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 Blackrock Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of VivoPower International and Blackrock Science.

Diversification Opportunities for VivoPower International and Blackrock Science

-0.72

Correlation Coefficient

VivoPower International  Blackrock Science

Pay attention - limited upside

The 3 months correlation between VivoPower and Blackrock is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Blackrock Science Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Science 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 Blackrock Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Science has no effect on the direction of VivoPower International i.e., VivoPower International and Blackrock Science go up and down completely randomly.

Pair Corralation between VivoPower International and Blackrock Science

Given the investment horizon of 90 days VivoPower International PLC is expected to generate 10.12 times more return on investment than Blackrock Science. However, VivoPower International is 10.12 times more volatile than Blackrock Science Technology. It trades about 0.02 of its potential returns per unit of risk. Blackrock Science Technology is currently generating about 0.18 per unit of risk. If you would invest  186.00  in VivoPower International PLC on September 5, 2024 and sell it today you would lose (49.00) from holding VivoPower International PLC or give up 26.34% of portfolio value over 90 days.

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

VivoPower International PLC  vs.  Blackrock Science Technology

VivoPower International

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VivoPower International PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, VivoPower International reported solid returns over the last few months and may actually be approaching a breakup point.

Blackrock Science

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Science Technology are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Blackrock Science showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VivoPower International and Blackrock Science

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

The idea behind VivoPower International PLC and Blackrock Science Technology 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.