Correlation Between V2X and Cadre Holdings
Can any of the company-specific risk be diversified away by investing in both V2X and Cadre Holdings 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 V2X and Cadre Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between V2X Inc and Cadre Holdings, you can compare the effects of market volatilities on V2X and Cadre Holdings 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 V2X with a short position of Cadre Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of V2X and Cadre Holdings.
Diversification Opportunities for V2X and Cadre Holdings
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between V2X and Cadre is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding V2X Inc and Cadre Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadre Holdings and V2X 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 V2X Inc are associated (or correlated) with Cadre Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadre Holdings has no effect on the direction of V2X i.e., V2X and Cadre Holdings go up and down completely randomly.
Pair Corralation between V2X and Cadre Holdings
Considering the 90-day investment horizon V2X is expected to generate 4.72 times less return on investment than Cadre Holdings. In addition to that, V2X is 1.13 times more volatile than Cadre Holdings. It trades about 0.0 of its total potential returns per unit of risk. Cadre Holdings is currently generating about 0.02 per unit of volatility. If you would invest 3,111 in Cadre Holdings on March 22, 2025 and sell it today you would earn a total of 176.00 from holding Cadre Holdings or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
V2X Inc vs. Cadre Holdings
Performance |
| Timeline |
| V2X Inc |
| Cadre Holdings |
V2X and Cadre Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with V2X and Cadre Holdings
The main advantage of trading using opposite V2X and Cadre Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if V2X position performs unexpectedly, Cadre Holdings 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 Cadre Holdings will offset losses from the drop in Cadre Holdings' long position.The idea behind V2X Inc and Cadre Holdings 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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