Correlation Between Veeco Instruments and Climb Global

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

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

Diversification Opportunities for Veeco Instruments and Climb Global

0.59

Correlation Coefficient

Veeco Instruments  Climb Global

Very weak diversification

The 3 months correlation between Veeco and Climb is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Veeco Instruments and Climb Global Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Climb Global Solutions and Veeco Instruments 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 Veeco Instruments are associated (or correlated) with Climb Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Climb Global Solutions has no effect on the direction of Veeco Instruments i.e., Veeco Instruments and Climb Global go up and down completely randomly.

Pair Corralation between Veeco Instruments and Climb Global

Given the investment horizon of 90 days Veeco Instruments is expected to under-perform the Climb Global. But the stock apears to be less risky and, when comparing its historical volatility, Veeco Instruments is 1.1 times less risky than Climb Global. The stock trades about -0.15 of its potential returns per unit of risk. The Climb Global Solutions is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  12,639  in Climb Global Solutions on December 28, 2024 and sell it today you would lose (1,639) from holding Climb Global Solutions or give up 12.97% of portfolio value over 90 days.

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

Veeco Instruments  vs.  Climb Global Solutions

Veeco Instruments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Veeco Instruments 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 fundamental 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.

Climb Global Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Climb Global Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Veeco Instruments and Climb Global

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

The idea behind Veeco Instruments and Climb Global Solutions 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.