Correlation Between Aterian and Veea

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

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

Diversification Opportunities for Aterian and Veea

0.13

Correlation Coefficient

Aterian  Veea

Average diversification

The 3 months correlation between Aterian and Veea is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Aterian and Veea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veea Inc and Aterian 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 Aterian are associated (or correlated) with Veea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veea Inc has no effect on the direction of Aterian i.e., Aterian and Veea go up and down completely randomly.

Pair Corralation between Aterian and Veea

Given the investment horizon of 90 days Aterian is expected to generate 0.32 times more return on investment than Veea. However, Aterian is 3.17 times less risky than Veea. It trades about -0.04 of its potential returns per unit of risk. Veea Inc is currently generating about -0.01 per unit of risk. If you would invest  1,620  in Aterian on October 11, 2024 and sell it today you would lose (1,380) from holding Aterian or give up 85.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	16.73%
Values	Daily Returns

Aterian  vs.  Veea Inc

Aterian

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aterian has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's technical and fundamental 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.

Veea Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Veea Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Veea sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aterian and Veea

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

The idea behind Aterian and Veea Inc 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.