Correlation Between 10X GENOMICS and Veeva Systems

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Can any of the company-specific risk be diversified away by investing in both 10X GENOMICS and Veeva 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 10X GENOMICS and Veeva Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 10X GENOMICS DL and Veeva Systems, you can compare the effects of market volatilities on 10X GENOMICS and Veeva 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 10X GENOMICS with a short position of Veeva Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of 10X GENOMICS and Veeva Systems.

Diversification Opportunities for 10X GENOMICS and Veeva Systems

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between 10X and Veeva is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding 10X GENOMICS DL and Veeva Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veeva Systems and 10X GENOMICS 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 10X GENOMICS DL are associated (or correlated) with Veeva Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veeva Systems has no effect on the direction of 10X GENOMICS i.e., 10X GENOMICS and Veeva Systems go up and down completely randomly.

Pair Corralation between 10X GENOMICS and Veeva Systems

Assuming the 90 days horizon 10X GENOMICS DL is expected to under-perform the Veeva Systems. In addition to that, 10X GENOMICS is 1.95 times more volatile than Veeva Systems. It trades about -0.03 of its total potential returns per unit of risk. Veeva Systems is currently generating about 0.04 per unit of volatility. If you would invest  15,300  in Veeva Systems on October 12, 2024 and sell it today you would earn a total of  5,330  from holding Veeva Systems or generate 34.84% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

10X GENOMICS DL  vs.  Veeva Systems

 Performance 
       Timeline  
10X GENOMICS DL 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in 10X GENOMICS DL are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, 10X GENOMICS reported solid returns over the last few months and may actually be approaching a breakup point.
Veeva Systems 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Veeva Systems are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Veeva Systems may actually be approaching a critical reversion point that can send shares even higher in February 2025.

10X GENOMICS and Veeva Systems Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with 10X GENOMICS and Veeva Systems

The main advantage of trading using opposite 10X GENOMICS and Veeva Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 10X GENOMICS position performs unexpectedly, Veeva 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 Veeva Systems will offset losses from the drop in Veeva Systems' long position.
The idea behind 10X GENOMICS DL and Veeva Systems 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.
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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