Correlation Between Vision Marine and EBay
Can any of the company-specific risk be diversified away by investing in both Vision Marine and EBay 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 Vision Marine and EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vision Marine Technologies and eBay Inc, you can compare the effects of market volatilities on Vision Marine and EBay 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 Vision Marine with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vision Marine and EBay.
Diversification Opportunities for Vision Marine and EBay
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vision and EBay is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Vision Marine Technologies and eBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eBay Inc and Vision Marine 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 Vision Marine Technologies are associated (or correlated) with EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eBay Inc has no effect on the direction of Vision Marine i.e., Vision Marine and EBay go up and down completely randomly.
Pair Corralation between Vision Marine and EBay
Given the investment horizon of 90 days Vision Marine Technologies is expected to generate 5.84 times more return on investment than EBay. However, Vision Marine is 5.84 times more volatile than eBay Inc. It trades about 0.04 of its potential returns per unit of risk. eBay Inc is currently generating about -0.05 per unit of risk. If you would invest 60.00 in Vision Marine Technologies on February 1, 2024 and sell it today you would earn a total of 1.00 from holding Vision Marine Technologies or generate 1.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Vision Marine Technologies vs. eBay Inc
Performance |
Timeline |
Vision Marine Techno |
eBay Inc |
Vision Marine and EBay Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vision Marine and EBay
The main advantage of trading using opposite Vision Marine and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vision Marine position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.Vision Marine vs. LCI Industries | Vision Marine vs. Winnebago Industries | Vision Marine vs. Thor Industries | Vision Marine vs. EZGO Technologies |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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