Correlation Between Viavi Solutions and Minim

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

By analyzing existing cross correlation between Viavi Solutions and Minim Inc, you can compare the effects of market volatilities on Viavi Solutions and Minim 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 Viavi Solutions with a short position of Minim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viavi Solutions and Minim.

Diversification Opportunities for Viavi Solutions and Minim

-0.08

Correlation Coefficient

Viavi Solutions  Minim

Good diversification

The 3 months correlation between Viavi and Minim is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Viavi Solutions and Minim Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minim Inc and Viavi Solutions 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 Viavi Solutions are associated (or correlated) with Minim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minim Inc has no effect on the direction of Viavi Solutions i.e., Viavi Solutions and Minim go up and down completely randomly.

Pair Corralation between Viavi Solutions and Minim

Given the investment horizon of 90 days Viavi Solutions is expected to generate 0.24 times more return on investment than Minim. However, Viavi Solutions is 4.14 times less risky than Minim. It trades about -0.52 of its potential returns per unit of risk. Minim Inc is currently generating about -0.33 per unit of risk. If you would invest  958.00  in Viavi Solutions on January 25, 2024 and sell it today you would lose (158.00) from holding Viavi Solutions or give up 16.49% of portfolio value over 90 days.

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

Viavi Solutions  vs.  Minim Inc

Viavi Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viavi Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in May 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Minim Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Minim Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Minim displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Viavi Solutions and Minim

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

The idea behind Viavi Solutions and Minim Inc 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.