Correlation Between Verra Mobility and Canaan
Can any of the company-specific risk be diversified away by investing in both Verra Mobility and Canaan 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 Verra Mobility and Canaan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verra Mobility Corp and Canaan Inc, you can compare the effects of market volatilities on Verra Mobility and Canaan 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 Verra Mobility with a short position of Canaan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verra Mobility and Canaan.
Diversification Opportunities for Verra Mobility and Canaan
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Verra and Canaan is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Verra Mobility Corp and Canaan Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaan Inc and Verra Mobility 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 Verra Mobility Corp are associated (or correlated) with Canaan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaan Inc has no effect on the direction of Verra Mobility i.e., Verra Mobility and Canaan go up and down completely randomly.
Pair Corralation between Verra Mobility and Canaan
Given the investment horizon of 90 days Verra Mobility Corp is expected to under-perform the Canaan. But the stock apears to be less risky and, when comparing its historical volatility, Verra Mobility Corp is 4.34 times less risky than Canaan. The stock trades about -0.14 of its potential returns per unit of risk. The Canaan Inc is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 106.00 in Canaan Inc on August 28, 2024 and sell it today you would earn a total of 102.00 from holding Canaan Inc or generate 96.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verra Mobility Corp vs. Canaan Inc
Performance |
| Timeline |
| Verra Mobility Corp |
| Canaan Inc |
Verra Mobility and Canaan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verra Mobility and Canaan
The main advantage of trading using opposite Verra Mobility and Canaan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verra Mobility position performs unexpectedly, Canaan 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 Canaan will offset losses from the drop in Canaan's long position.| Verra Mobility vs. International Money Express | Verra Mobility vs. Option Care Health | Verra Mobility vs. R1 RCM Inc |
| Canaan vs. 3D Systems | Canaan vs. NetApp Inc | Canaan vs. Rigetti Computing | Canaan vs. Logitech International SA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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