Correlation Between VivoPower International and Deutsche Science

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

Diversification Opportunities for VivoPower International and Deutsche Science

0.03

Correlation Coefficient

VivoPower International  Deutsche Science

Significant diversification

The 3 months correlation between VivoPower and Deutsche is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Deutsche Science And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Science And 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 Deutsche Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Science And has no effect on the direction of VivoPower International i.e., VivoPower International and Deutsche Science go up and down completely randomly.

Pair Corralation between VivoPower International and Deutsche Science

Given the investment horizon of 90 days VivoPower International PLC is expected to generate 3.4 times more return on investment than Deutsche Science. However, VivoPower International is 3.4 times more volatile than Deutsche Science And. It trades about 0.24 of its potential returns per unit of risk. Deutsche Science And is currently generating about -0.11 per unit of risk. If you would invest  107.00  in VivoPower International PLC on September 24, 2024 and sell it today you would earn a total of  39.00  from holding VivoPower International PLC or generate 36.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

VivoPower International PLC  vs.  Deutsche Science And

VivoPower International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VivoPower International PLC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, VivoPower International reported solid returns over the last few months and may actually be approaching a breakup point.

Deutsche Science And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deutsche Science And has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Deutsche Science is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with VivoPower International and Deutsche Science

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

The idea behind VivoPower International PLC and Deutsche Science And 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.