Correlation Between Vision Energy and Upbound

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

By analyzing existing cross correlation between Vision Energy Corp and Upbound Group, you can compare the effects of market volatilities on Vision Energy and Upbound 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 Energy with a short position of Upbound. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vision Energy and Upbound.

Diversification Opportunities for Vision Energy and Upbound

0.1

Correlation Coefficient

Vision Energy  Upbound

Average diversification

The 3 months correlation between Vision and Upbound is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Vision Energy Corp and Upbound Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upbound Group and Vision Energy 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 Energy Corp are associated (or correlated) with Upbound. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upbound Group has no effect on the direction of Vision Energy i.e., Vision Energy and Upbound go up and down completely randomly.

Pair Corralation between Vision Energy and Upbound

Given the investment horizon of 90 days Vision Energy Corp is expected to generate 144.07 times more return on investment than Upbound. However, Vision Energy is 144.07 times more volatile than Upbound Group. It trades about 0.32 of its potential returns per unit of risk. Upbound Group is currently generating about -0.23 per unit of risk. If you would invest  1.00  in Vision Energy Corp on January 25, 2024 and sell it today you would lose (0.86) from holding Vision Energy Corp or give up 86.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Vision Energy Corp  vs.  Upbound Group

Vision Energy Corp

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Vision Energy Corp are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Vision Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Upbound Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Upbound Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Vision Energy and Upbound

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

The idea behind Vision Energy Corp and Upbound Group 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.