Correlation Between VNET Group and Formula Systems
Can any of the company-specific risk be diversified away by investing in both VNET Group and Formula Systems 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 VNET Group and Formula Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VNET Group DRC and Formula Systems 1985, you can compare the effects of market volatilities on VNET Group and Formula Systems 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 VNET Group with a short position of Formula Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of VNET Group and Formula Systems.
Diversification Opportunities for VNET Group and Formula Systems
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VNET and Formula is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding VNET Group DRC and Formula Systems 1985 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formula Systems 1985 and VNET Group 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 VNET Group DRC are associated (or correlated) with Formula Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formula Systems 1985 has no effect on the direction of VNET Group i.e., VNET Group and Formula Systems go up and down completely randomly.
Pair Corralation between VNET Group and Formula Systems
Given the investment horizon of 90 days VNET Group is expected to generate 2.16 times less return on investment than Formula Systems. In addition to that, VNET Group is 1.18 times more volatile than Formula Systems 1985. It trades about 0.06 of its total potential returns per unit of risk. Formula Systems 1985 is currently generating about 0.15 per unit of volatility. If you would invest 12,689 in Formula Systems 1985 on September 26, 2025 and sell it today you would earn a total of 6,367 from holding Formula Systems 1985 or generate 50.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 60.0% |
| Values | Daily Returns |
VNET Group DRC vs. Formula Systems 1985
Performance |
| Timeline |
| VNET Group DRC |
| Formula Systems 1985 |
Risk-Adjusted Performance
Strong
Weak | Strong |
VNET Group and Formula Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VNET Group and Formula Systems
The main advantage of trading using opposite VNET Group and Formula Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VNET Group position performs unexpectedly, Formula Systems 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 Formula Systems will offset losses from the drop in Formula Systems' long position.| VNET Group vs. C3 Ai Inc | VNET Group vs. Globant SA | VNET Group vs. Innodata | VNET Group vs. CLARIVATE PLC |
| Formula Systems vs. Sapiens International | Formula Systems vs. Innodata | Formula Systems vs. C3 Ai Inc | Formula Systems vs. DXC Technology Co |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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