Correlation Between VPC Specialty and Ceiba Investments

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

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

Diversification Opportunities for VPC Specialty and Ceiba Investments

-0.66

Correlation Coefficient

VPC Specialty  Ceiba Investments

Excellent diversification

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

Pair Corralation between VPC Specialty and Ceiba Investments

Assuming the 90 days trading horizon VPC Specialty Lending is expected to generate 0.19 times more return on investment than Ceiba Investments. However, VPC Specialty Lending is 5.16 times less risky than Ceiba Investments. It trades about 0.11 of its potential returns per unit of risk. Ceiba Investments is currently generating about -0.11 per unit of risk. If you would invest  1,275  in VPC Specialty Lending on April 21, 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

VPC Specialty Lending  vs.  Ceiba Investments

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.

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.

Pair Trading with VPC Specialty and Ceiba Investments

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

The idea behind VPC Specialty Lending and Ceiba Investments 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..