Correlation Between Vergnet and Blockchain Group

Can any of the company-specific risk be diversified away by investing in both Vergnet and Blockchain Group 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 Vergnet and Blockchain Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vergnet and Blockchain Group SA, you can compare the effects of market volatilities on Vergnet and Blockchain Group 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 Vergnet with a short position of Blockchain Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vergnet and Blockchain Group.

Diversification Opportunities for Vergnet and Blockchain Group

-0.89

Correlation Coefficient

Vergnet  Blockchain Group

Pay attention - limited upside

The 3 months correlation between Vergnet and Blockchain is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Vergnet and Blockchain Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blockchain Group and Vergnet 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 Vergnet are associated (or correlated) with Blockchain Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blockchain Group has no effect on the direction of Vergnet i.e., Vergnet and Blockchain Group go up and down completely randomly.

Pair Corralation between Vergnet and Blockchain Group

Assuming the 90 days trading horizon Vergnet is expected to under-perform the Blockchain Group. In addition to that, Vergnet is 3.55 times more volatile than Blockchain Group SA. It trades about -0.1 of its total potential returns per unit of risk. Blockchain Group SA is currently generating about 0.02 per unit of volatility. If you would invest  38.00  in Blockchain Group SA on October 12, 2024 and sell it today you would lose (6.00) from holding Blockchain Group SA or give up 15.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Vergnet  vs.  Blockchain Group SA

Vergnet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vergnet has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Blockchain Group

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blockchain Group SA are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Blockchain Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vergnet and Blockchain Group

The main advantage of trading using opposite Vergnet and Blockchain Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vergnet position performs unexpectedly, Blockchain Group 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 Blockchain Group will offset losses from the drop in Blockchain Group's long position.

The idea behind Vergnet and Blockchain Group SA 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.