Correlation Between Veea and Globant SA

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

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

Diversification Opportunities for Veea and Globant SA

-0.51

Correlation Coefficient

Veea  Globant SA

Excellent diversification

The 3 months correlation between Veea and Globant is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Veea Inc and Globant SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globant SA 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 Globant SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globant SA has no effect on the direction of Veea i.e., Veea and Globant SA go up and down completely randomly.

Pair Corralation between Veea and Globant SA

Given the investment horizon of 90 days Veea Inc is expected to under-perform the Globant SA. In addition to that, Veea is 7.87 times more volatile than Globant SA. It trades about -0.05 of its total potential returns per unit of risk. Globant SA is currently generating about 0.09 per unit of volatility. If you would invest  20,224  in Globant SA on August 30, 2024 and sell it today you would earn a total of  2,731  from holding Globant SA or generate 13.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	87.3%
Values	Daily Returns

Veea Inc  vs.  Globant SA

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 fragile performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Globant SA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Globant SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Globant SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Veea and Globant SA

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

The idea behind Veea Inc and Globant SA 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.