Correlation Between Veeva Systems and AEON STORES

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

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

Diversification Opportunities for Veeva Systems and AEON STORES

0.0

Correlation Coefficient

Veeva Systems  AEON STORES

Pay attention - limited upside

The 3 months correlation between Veeva and AEON is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Veeva Systems and AEON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON STORES and Veeva 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 Veeva Systems are associated (or correlated) with AEON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON STORES has no effect on the direction of Veeva Systems i.e., Veeva Systems and AEON STORES go up and down completely randomly.

Pair Corralation between Veeva Systems and AEON STORES

Assuming the 90 days horizon Veeva Systems is expected to under-perform the AEON STORES. In addition to that, Veeva Systems is 1.1 times more volatile than AEON STORES. It trades about -0.29 of its total potential returns per unit of risk. AEON STORES is currently generating about -0.06 per unit of volatility. If you would invest  6.05  in AEON STORES on October 11, 2024 and sell it today you would lose (0.15) from holding AEON STORES or give up 2.48% of portfolio value over 90 days.

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

Veeva Systems  vs.  AEON STORES

Veeva Systems

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Veeva Systems are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Veeva Systems may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AEON STORES

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Veeva Systems and AEON STORES

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

The idea behind Veeva Systems and AEON STORES 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .