Correlation Between VR Factory and Enter Air

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

By analyzing existing cross correlation between VR Factory Games and Enter Air SA, you can compare the effects of market volatilities on VR Factory and Enter Air 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 VR Factory with a short position of Enter Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of VR Factory and Enter Air.

Diversification Opportunities for VR Factory and Enter Air

0.2

Correlation Coefficient

VR Factory  Enter Air

Modest diversification

The 3 months correlation between VRF and Enter is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding VR Factory Games and Enter Air SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enter Air SA and VR Factory 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 VR Factory Games are associated (or correlated) with Enter Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enter Air SA has no effect on the direction of VR Factory i.e., VR Factory and Enter Air go up and down completely randomly.

Pair Corralation between VR Factory and Enter Air

Assuming the 90 days trading horizon VR Factory Games is expected to generate 3.27 times more return on investment than Enter Air. However, VR Factory is 3.27 times more volatile than Enter Air SA. It trades about 0.0 of its potential returns per unit of risk. Enter Air SA is currently generating about -0.01 per unit of risk. If you would invest  35.00  in VR Factory Games on April 24, 2025 and sell it today you would lose (2.00) from holding VR Factory Games or give up 5.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

VR Factory Games  vs.  Enter Air SA

VR Factory Games

Risk-Adjusted Performance

Very Weak

Over the last 90 days VR Factory Games has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, VR Factory is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Enter Air SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enter Air SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Enter Air is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with VR Factory and Enter Air

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

The idea behind VR Factory Games and Enter Air SA 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.