Correlation Between VerifyMe and Wrap Technologies
Can any of the company-specific risk be diversified away by investing in both VerifyMe and Wrap Technologies 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 Wrap Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VerifyMe and Wrap Technologies, you can compare the effects of market volatilities on VerifyMe and Wrap Technologies 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 Wrap Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of VerifyMe and Wrap Technologies.
Diversification Opportunities for VerifyMe and Wrap Technologies
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between VerifyMe and Wrap is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding VerifyMe and Wrap Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wrap Technologies 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 Wrap Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wrap Technologies has no effect on the direction of VerifyMe i.e., VerifyMe and Wrap Technologies go up and down completely randomly.
Pair Corralation between VerifyMe and Wrap Technologies
Given the investment horizon of 90 days VerifyMe is expected to under-perform the Wrap Technologies. In addition to that, VerifyMe is 1.81 times more volatile than Wrap Technologies. It trades about -0.25 of its total potential returns per unit of risk. Wrap Technologies is currently generating about 0.13 per unit of volatility. If you would invest 161.00 in Wrap Technologies on September 2, 2024 and sell it today you would earn a total of 19.00 from holding Wrap Technologies or generate 11.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VerifyMe vs. Wrap Technologies
Performance |
| Timeline |
| VerifyMe |
| Wrap Technologies |
VerifyMe and Wrap Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VerifyMe and Wrap Technologies
The main advantage of trading using opposite VerifyMe and Wrap Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VerifyMe position performs unexpectedly, Wrap Technologies 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 Wrap Technologies will offset losses from the drop in Wrap Technologies' long position.The idea behind VerifyMe and Wrap Technologies 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.| Wrap Technologies vs. Red Cat Holdings | Wrap Technologies vs. WiSA Technologies | Wrap Technologies vs. VerifyMe | Wrap Technologies vs. Oblong Inc |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |