Correlation Between Veea and Wells Fargo

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

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

Diversification Opportunities for Veea and Wells Fargo

-0.75

Correlation Coefficient

Veea  Wells Fargo

Pay attention - limited upside

The 3 months correlation between Veea and Wells is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Veea Inc and Wells Fargo Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Emerging and Veea 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 Veea Inc are associated (or correlated) with Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Emerging has no effect on the direction of Veea i.e., Veea and Wells Fargo go up and down completely randomly.

Pair Corralation between Veea and Wells Fargo

Given the investment horizon of 90 days Veea Inc is expected to under-perform the Wells Fargo. In addition to that, Veea is 4.55 times more volatile than Wells Fargo Emerging. It trades about -0.29 of its total potential returns per unit of risk. Wells Fargo Emerging is currently generating about 0.1 per unit of volatility. If you would invest  2,665  in Wells Fargo Emerging on December 20, 2024 and sell it today you would earn a total of  176.00  from holding Wells Fargo Emerging or generate 6.6% return on investment over 90 days.

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

Veea Inc  vs.  Wells Fargo Emerging

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.

Wells Fargo Emerging

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wells Fargo Emerging are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Wells Fargo may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Veea and Wells Fargo

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

The idea behind Veea Inc and Wells Fargo Emerging 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.