Correlation Between VerifyMe and Global Blockchain
Can any of the company-specific risk be diversified away by investing in both VerifyMe and Global Blockchain 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 VerifyMe and Global Blockchain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VerifyMe and Global Blockchain Acquisition, you can compare the effects of market volatilities on VerifyMe and Global Blockchain 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 VerifyMe with a short position of Global Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of VerifyMe and Global Blockchain.
Diversification Opportunities for VerifyMe and Global Blockchain
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VerifyMe and Global is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding VerifyMe and Global Blockchain Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Blockchain and VerifyMe 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 VerifyMe are associated (or correlated) with Global Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Blockchain has no effect on the direction of VerifyMe i.e., VerifyMe and Global Blockchain go up and down completely randomly.
Pair Corralation between VerifyMe and Global Blockchain
Given the investment horizon of 90 days VerifyMe is expected to under-perform the Global Blockchain. But the stock apears to be less risky and, when comparing its historical volatility, VerifyMe is 42.67 times less risky than Global Blockchain. The stock trades about -0.08 of its potential returns per unit of risk. The Global Blockchain Acquisition is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Global Blockchain Acquisition on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Global Blockchain Acquisition or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 71.43% |
| Values | Daily Returns |
VerifyMe vs. Global Blockchain Acquisition
Performance |
| Timeline |
| VerifyMe |
| Global Blockchain |
VerifyMe and Global Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VerifyMe and Global Blockchain
The main advantage of trading using opposite VerifyMe and Global Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VerifyMe position performs unexpectedly, Global Blockchain 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 Global Blockchain will offset losses from the drop in Global Blockchain's long position.The idea behind VerifyMe and Global Blockchain Acquisition 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.| Global Blockchain vs. Desktop Metal | Global Blockchain vs. Fabrinet | Global Blockchain vs. Knowles Cor | Global Blockchain vs. Ubiquiti Networks |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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