Correlation Between Century Wind and Vivotek

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

By analyzing existing cross correlation between Century Wind Power and Vivotek, you can compare the effects of market volatilities on Century Wind and Vivotek 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 Century Wind with a short position of Vivotek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Wind and Vivotek.

Diversification Opportunities for Century Wind and Vivotek

-0.37

Correlation Coefficient

Century Wind  Vivotek

Very good diversification

The 3 months correlation between Century and Vivotek is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Century Wind Power and Vivotek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivotek and Century Wind 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 Century Wind Power are associated (or correlated) with Vivotek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivotek has no effect on the direction of Century Wind i.e., Century Wind and Vivotek go up and down completely randomly.

Pair Corralation between Century Wind and Vivotek

Assuming the 90 days trading horizon Century Wind Power is expected to generate 1.29 times more return on investment than Vivotek. However, Century Wind is 1.29 times more volatile than Vivotek. It trades about 0.12 of its potential returns per unit of risk. Vivotek is currently generating about -0.08 per unit of risk. If you would invest  25,285  in Century Wind Power on April 25, 2025 and sell it today you would earn a total of  4,715  from holding Century Wind Power or generate 18.65% return on investment over 90 days.

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

Century Wind Power  vs.  Vivotek

Century Wind Power

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Century Wind Power are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Century Wind showed solid returns over the last few months and may actually be approaching a breakup point.

Vivotek

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vivotek has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Century Wind and Vivotek

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

The idea behind Century Wind Power and Vivotek 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.