Correlation Between Ceiba Investments and VPC Specialty

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

By analyzing existing cross correlation between Ceiba Investments and VPC Specialty Lending, you can compare the effects of market volatilities on Ceiba Investments and VPC Specialty 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 Ceiba Investments with a short position of VPC Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceiba Investments and VPC Specialty.

Diversification Opportunities for Ceiba Investments and VPC Specialty

-0.66

Correlation Coefficient

Ceiba Investments  VPC Specialty

Excellent diversification

The 3 months correlation between Ceiba and VPC is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ceiba Investments and VPC Specialty Lending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VPC Specialty Lending and Ceiba Investments 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 Ceiba Investments are associated (or correlated) with VPC Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VPC Specialty Lending has no effect on the direction of Ceiba Investments i.e., Ceiba Investments and VPC Specialty go up and down completely randomly.

Pair Corralation between Ceiba Investments and VPC Specialty

Assuming the 90 days trading horizon Ceiba Investments is expected to under-perform the VPC Specialty. In addition to that, Ceiba Investments is 5.16 times more volatile than VPC Specialty Lending. It trades about -0.11 of its total potential returns per unit of risk. VPC Specialty Lending is currently generating about 0.11 per unit of volatility. If you would invest  1,275  in VPC Specialty Lending on April 22, 2025 and sell it today you would earn a total of  205.00  from holding VPC Specialty Lending or generate 16.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Ceiba Investments  vs.  VPC Specialty Lending

Ceiba Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ceiba Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

VPC Specialty Lending

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VPC Specialty Lending are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, VPC Specialty exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ceiba Investments and VPC Specialty

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

The idea behind Ceiba Investments and VPC Specialty Lending 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.