Correlation Between Azure Holding and Verde Bio

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

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

Diversification Opportunities for Azure Holding and Verde Bio

-0.64

Correlation Coefficient

Azure Holding  Verde Bio

Excellent diversification

The 3 months correlation between Azure and Verde is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Azure Holding Group and Verde Bio Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verde Bio Holdings and Azure Holding 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 Azure Holding Group are associated (or correlated) with Verde Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verde Bio Holdings has no effect on the direction of Azure Holding i.e., Azure Holding and Verde Bio go up and down completely randomly.

Pair Corralation between Azure Holding and Verde Bio

Given the investment horizon of 90 days Azure Holding Group is expected to generate 2.68 times more return on investment than Verde Bio. However, Azure Holding is 2.68 times more volatile than Verde Bio Holdings. It trades about 0.11 of its potential returns per unit of risk. Verde Bio Holdings is currently generating about -0.13 per unit of risk. If you would invest  13.00  in Azure Holding Group on December 26, 2024 and sell it today you would earn a total of  4.00  from holding Azure Holding Group or generate 30.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Azure Holding Group  vs.  Verde Bio Holdings

Azure Holding Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Azure Holding Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Azure Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Verde Bio Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Verde Bio Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Azure Holding and Verde Bio

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

The idea behind Azure Holding Group and Verde Bio Holdings 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 Transaction History module to view history of all your transactions and understand their impact on performance.