Correlation Between VR Factory and Vivid Games

Can any of the company-specific risk be diversified away by investing in both VR Factory and Vivid Games 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 Vivid Games 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 Vivid Games SA, you can compare the effects of market volatilities on VR Factory and Vivid Games 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 Vivid Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of VR Factory and Vivid Games.

Diversification Opportunities for VR Factory and Vivid Games

0.06

Correlation Coefficient

VR Factory  Vivid Games

Significant diversification

The 3 months correlation between VRF and Vivid is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding VR Factory Games and Vivid Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivid Games 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 Vivid Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivid Games SA has no effect on the direction of VR Factory i.e., VR Factory and Vivid Games go up and down completely randomly.

Pair Corralation between VR Factory and Vivid Games

Assuming the 90 days trading horizon VR Factory Games is expected to generate 1.93 times more return on investment than Vivid Games. However, VR Factory is 1.93 times more volatile than Vivid Games SA. It trades about 0.01 of its potential returns per unit of risk. Vivid Games SA is currently generating about -0.07 per unit of risk. If you would invest  35.00  in VR Factory Games on April 25, 2025 and sell it today you would lose (1.00) from holding VR Factory Games or give up 2.86% of portfolio value over 90 days.

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

VR Factory Games  vs.  Vivid Games SA

VR Factory Games

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VR Factory Games are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Vivid Games SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vivid Games SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with VR Factory and Vivid Games

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

The idea behind VR Factory Games and Vivid Games 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.