Correlation Between Fomento Economico and Veea
Can any of the company-specific risk be diversified away by investing in both Fomento Economico and Veea 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 Fomento Economico and Veea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fomento Economico Mexicano and Veea Inc, you can compare the effects of market volatilities on Fomento Economico and Veea 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 Fomento Economico with a short position of Veea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Economico and Veea.
Diversification Opportunities for Fomento Economico and Veea
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fomento and Veea is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Economico Mexicano and Veea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veea Inc and Fomento Economico 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 Fomento Economico Mexicano are associated (or correlated) with Veea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veea Inc has no effect on the direction of Fomento Economico i.e., Fomento Economico and Veea go up and down completely randomly.
Pair Corralation between Fomento Economico and Veea
Considering the 90-day investment horizon Fomento Economico Mexicano is expected to under-perform the Veea. But the stock apears to be less risky and, when comparing its historical volatility, Fomento Economico Mexicano is 4.55 times less risky than Veea. The stock trades about -0.1 of its potential returns per unit of risk. The Veea Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 286.00 in Veea Inc on September 14, 2024 and sell it today you would earn a total of 46.00 from holding Veea Inc or generate 16.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fomento Economico Mexicano vs. Veea Inc
Performance |
| Timeline |
| Fomento Economico |
| Veea Inc |
Fomento Economico and Veea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fomento Economico and Veea
The main advantage of trading using opposite Fomento Economico and Veea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomento Economico position performs unexpectedly, Veea 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 Veea will offset losses from the drop in Veea's long position.| Fomento Economico vs. Ambev SA ADR | Fomento Economico vs. Boston Beer | Fomento Economico vs. Carlsberg AS | Fomento Economico vs. Molson Coors Brewing |
| Veea vs. BJs Restaurants | Veea vs. Flexible Solutions International | Veea vs. Kura Sushi USA | Veea vs. Hudson Technologies |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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