Correlation Between BICE11 and VECTIS DATAGRO

Can any of the company-specific risk be diversified away by investing in both BICE11 and VECTIS DATAGRO 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 BICE11 and VECTIS DATAGRO into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BICE11 and VECTIS DATAGRO CR, you can compare the effects of market volatilities on BICE11 and VECTIS DATAGRO 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 BICE11 with a short position of VECTIS DATAGRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of BICE11 and VECTIS DATAGRO.

Diversification Opportunities for BICE11 and VECTIS DATAGRO

-0.76

Correlation Coefficient

BICE11  VECTIS DATAGRO

Pay attention - limited upside

The 3 months correlation between BICE11 and VECTIS is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding BICE11 and VECTIS DATAGRO CR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VECTIS DATAGRO CR and BICE11 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 BICE11 are associated (or correlated) with VECTIS DATAGRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VECTIS DATAGRO CR has no effect on the direction of BICE11 i.e., BICE11 and VECTIS DATAGRO go up and down completely randomly.

Pair Corralation between BICE11 and VECTIS DATAGRO

Assuming the 90 days trading horizon BICE11 is expected to generate 0.09 times more return on investment than VECTIS DATAGRO. However, BICE11 is 10.74 times less risky than VECTIS DATAGRO. It trades about 0.24 of its potential returns per unit of risk. VECTIS DATAGRO CR is currently generating about -0.06 per unit of risk. If you would invest  88,480  in BICE11 on April 20, 2025 and sell it today you would earn a total of  1,420  from holding BICE11 or generate 1.6% return on investment over 90 days.

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

BICE11  vs.  VECTIS DATAGRO CR

BICE11

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BICE11 are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong fundamental indicators, BICE11 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

VECTIS DATAGRO CR

Risk-Adjusted Performance

Very Weak

Over the last 90 days VECTIS DATAGRO CR has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, VECTIS DATAGRO is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BICE11 and VECTIS DATAGRO

The main advantage of trading using opposite BICE11 and VECTIS DATAGRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BICE11 position performs unexpectedly, VECTIS DATAGRO 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 VECTIS DATAGRO will offset losses from the drop in VECTIS DATAGRO's long position.

The idea behind BICE11 and VECTIS DATAGRO CR 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.