Correlation Between Vizio Holding and Singing Machine

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

By analyzing existing cross correlation between Vizio Holding Corp and The Singing Machine, you can compare the effects of market volatilities on Vizio Holding and Singing Machine 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 Vizio Holding with a short position of Singing Machine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vizio Holding and Singing Machine.

Diversification Opportunities for Vizio Holding and Singing Machine

0.67

Correlation Coefficient

Vizio Holding  Singing Machine

Poor diversification

The 3 months correlation between Vizio and Singing is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Vizio Holding Corp and The Singing Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singing Machine and Vizio Holding 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 Vizio Holding Corp are associated (or correlated) with Singing Machine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singing Machine has no effect on the direction of Vizio Holding i.e., Vizio Holding and Singing Machine go up and down completely randomly.

Pair Corralation between Vizio Holding and Singing Machine

Given the investment horizon of 90 days Vizio Holding Corp is expected to under-perform the Singing Machine. But the stock apears to be less risky and, when comparing its historical volatility, Vizio Holding Corp is 19.61 times less risky than Singing Machine. The stock trades about -0.19 of its potential returns per unit of risk. The The Singing Machine is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  88.00  in The Singing Machine on January 30, 2024 and sell it today you would earn a total of  13.00  from holding The Singing Machine or generate 14.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Vizio Holding Corp  vs.  The Singing Machine

Vizio Holding Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vizio Holding Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting forward indicators, Vizio Holding displayed solid returns over the last few months and may actually be approaching a breakup point.

Singing Machine

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Singing Machine are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Singing Machine unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vizio Holding and Singing Machine

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

The idea behind Vizio Holding Corp and The Singing Machine 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.