Correlation Between Electronics Fund and Veea

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

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

Diversification Opportunities for Electronics Fund and Veea

0.18

Correlation Coefficient

Electronics Fund  Veea

Average diversification

The 3 months correlation between Electronics and Veea is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Electronics Fund Class and Veea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veea Inc and Electronics Fund 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 Electronics Fund Class 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 Electronics Fund i.e., Electronics Fund and Veea go up and down completely randomly.

Pair Corralation between Electronics Fund and Veea

Assuming the 90 days horizon Electronics Fund Class is expected to generate 0.29 times more return on investment than Veea. However, Electronics Fund Class is 3.47 times less risky than Veea. It trades about 0.03 of its potential returns per unit of risk. Veea Inc is currently generating about -0.03 per unit of risk. If you would invest  40,153  in Electronics Fund Class on October 25, 2024 and sell it today you would earn a total of  1,110  from holding Electronics Fund Class or generate 2.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Electronics Fund Class  vs.  Veea Inc

Electronics Fund Class

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Electronics Fund Class are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Electronics Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Veea Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Electronics Fund and Veea

The main advantage of trading using opposite Electronics Fund and Veea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronics Fund 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 Electronics Fund Class 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.