Correlation Between Viavi Solutions and Moving IMage

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

By analyzing existing cross correlation between Viavi Solutions and Moving iMage Technologies, you can compare the effects of market volatilities on Viavi Solutions and Moving IMage 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 Moving IMage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viavi Solutions and Moving IMage.

Diversification Opportunities for Viavi Solutions and Moving IMage

0.36

Correlation Coefficient

Viavi Solutions  Moving IMage

Weak diversification

The 3 months correlation between Viavi and Moving is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Viavi Solutions and Moving iMage Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moving iMage Technologies 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 Moving IMage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moving iMage Technologies has no effect on the direction of Viavi Solutions i.e., Viavi Solutions and Moving IMage go up and down completely randomly.

Pair Corralation between Viavi Solutions and Moving IMage

Given the investment horizon of 90 days Viavi Solutions is expected to generate 0.6 times more return on investment than Moving IMage. However, Viavi Solutions is 1.67 times less risky than Moving IMage. It trades about 0.04 of its potential returns per unit of risk. Moving iMage Technologies is currently generating about -0.05 per unit of risk. If you would invest  758.00  in Viavi Solutions on January 17, 2024 and sell it today you would earn a total of  74.00  from holding Viavi Solutions or generate 9.76% return on investment over 90 days.

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

Viavi Solutions  vs.  Moving iMage Technologies

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 inconsistent 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.

Moving iMage Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moving iMage Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in May 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Viavi Solutions and Moving IMage

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

The idea behind Viavi Solutions and Moving iMage Technologies 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.