Correlation Between Wearable Devices and Vuzix Corp

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

By analyzing existing cross correlation between Wearable Devices and Vuzix Corp Cmn, you can compare the effects of market volatilities on Wearable Devices and Vuzix Corp 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 Wearable Devices with a short position of Vuzix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wearable Devices and Vuzix Corp.

Diversification Opportunities for Wearable Devices and Vuzix Corp

-0.5

Correlation Coefficient

Wearable Devices  Vuzix Corp

Very good diversification

The 3 months correlation between Wearable and Vuzix is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Wearable Devices and Vuzix Corp Cmn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vuzix Corp Cmn and Wearable Devices 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 Wearable Devices are associated (or correlated) with Vuzix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vuzix Corp Cmn has no effect on the direction of Wearable Devices i.e., Wearable Devices and Vuzix Corp go up and down completely randomly.

Pair Corralation between Wearable Devices and Vuzix Corp

Given the investment horizon of 90 days Wearable Devices is expected to under-perform the Vuzix Corp. In addition to that, Wearable Devices is 1.14 times more volatile than Vuzix Corp Cmn. It trades about -0.2 of its total potential returns per unit of risk. Vuzix Corp Cmn is currently generating about 0.22 per unit of volatility. If you would invest  98.00  in Vuzix Corp Cmn on September 5, 2024 and sell it today you would earn a total of  153.00  from holding Vuzix Corp Cmn or generate 156.12% return on investment over 90 days.

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

Wearable Devices  vs.  Vuzix Corp Cmn

Wearable Devices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wearable Devices has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Vuzix Corp Cmn

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vuzix Corp Cmn are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, Vuzix Corp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wearable Devices and Vuzix Corp

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

The idea behind Wearable Devices and Vuzix Corp Cmn 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.