Correlation Between VITEC SOFTWARE and LEONS FURNITURE

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

By analyzing existing cross correlation between VITEC SOFTWARE GROUP and LEONS FURNITURE, you can compare the effects of market volatilities on VITEC SOFTWARE and LEONS FURNITURE 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 VITEC SOFTWARE with a short position of LEONS FURNITURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of VITEC SOFTWARE and LEONS FURNITURE.

Diversification Opportunities for VITEC SOFTWARE and LEONS FURNITURE

-0.4

Correlation Coefficient

VITEC SOFTWARE  LEONS FURNITURE

Very good diversification

The 3 months correlation between VITEC and LEONS is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding VITEC SOFTWARE GROUP and LEONS FURNITURE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEONS FURNITURE and VITEC SOFTWARE 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 VITEC SOFTWARE GROUP are associated (or correlated) with LEONS FURNITURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEONS FURNITURE has no effect on the direction of VITEC SOFTWARE i.e., VITEC SOFTWARE and LEONS FURNITURE go up and down completely randomly.

Pair Corralation between VITEC SOFTWARE and LEONS FURNITURE

Assuming the 90 days horizon VITEC SOFTWARE GROUP is expected to under-perform the LEONS FURNITURE. In addition to that, VITEC SOFTWARE is 1.74 times more volatile than LEONS FURNITURE. It trades about -0.15 of its total potential returns per unit of risk. LEONS FURNITURE is currently generating about 0.17 per unit of volatility. If you would invest  1,400  in LEONS FURNITURE on April 20, 2025 and sell it today you would earn a total of  290.00  from holding LEONS FURNITURE or generate 20.71% return on investment over 90 days.

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

VITEC SOFTWARE GROUP  vs.  LEONS FURNITURE

VITEC SOFTWARE GROUP

Risk-Adjusted Performance

Very Weak

Over the last 90 days VITEC SOFTWARE GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

LEONS FURNITURE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LEONS FURNITURE are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, LEONS FURNITURE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VITEC SOFTWARE and LEONS FURNITURE

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

The idea behind VITEC SOFTWARE GROUP and LEONS FURNITURE 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.