Correlation Between Data Storage and Veea

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

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

Diversification Opportunities for Data Storage and Veea

0.85

Correlation Coefficient

Data Storage  Veea

Very poor diversification

The 3 months correlation between Data and Veea is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Data Storage Corp and Veea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veea Inc and Data Storage 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 Data Storage Corp 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 Data Storage i.e., Data Storage and Veea go up and down completely randomly.

Pair Corralation between Data Storage and Veea

Given the investment horizon of 90 days Data Storage Corp is expected to generate 0.66 times more return on investment than Veea. However, Data Storage Corp is 1.52 times less risky than Veea. It trades about -0.02 of its potential returns per unit of risk. Veea Inc is currently generating about -0.22 per unit of risk. If you would invest  406.00  in Data Storage Corp on December 26, 2024 and sell it today you would lose (33.00) from holding Data Storage Corp or give up 8.13% of portfolio value over 90 days.

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

Data Storage Corp  vs.  Veea Inc

Data Storage Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Data Storage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Data Storage is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Veea Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Veea Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Data Storage and Veea

The main advantage of trading using opposite Data Storage and Veea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data Storage 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 Data Storage Corp 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.