Correlation Between EPAM Systems and Veea

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

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

Diversification Opportunities for EPAM Systems and Veea

0.15

Correlation Coefficient

EPAM Systems  Veea

Average diversification

The 3 months correlation between EPAM and Veea is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding EPAM Systems and Veea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veea Inc and EPAM Systems 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 EPAM Systems 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 EPAM Systems i.e., EPAM Systems and Veea go up and down completely randomly.

Pair Corralation between EPAM Systems and Veea

Given the investment horizon of 90 days EPAM Systems is expected to generate 0.53 times more return on investment than Veea. However, EPAM Systems is 1.89 times less risky than Veea. It trades about -0.08 of its potential returns per unit of risk. Veea Inc is currently generating about -0.3 per unit of risk. If you would invest  22,916  in EPAM Systems on December 3, 2024 and sell it today you would lose (2,302) from holding EPAM Systems or give up 10.05% of portfolio value over 90 days.

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

EPAM Systems  vs.  Veea Inc

EPAM Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days EPAM Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm 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 inconsistent 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 EPAM Systems and Veea

The main advantage of trading using opposite EPAM Systems and Veea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPAM Systems 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 EPAM Systems 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.