Correlation Between Veea and Invesco Technology

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

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

Diversification Opportunities for Veea and Invesco Technology

-0.58

Correlation Coefficient

Veea  Invesco Technology

Excellent diversification

The 3 months correlation between Veea and Invesco is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Veea Inc and Invesco Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Technology 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 Invesco Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Technology has no effect on the direction of Veea i.e., Veea and Invesco Technology go up and down completely randomly.

Pair Corralation between Veea and Invesco Technology

Given the investment horizon of 90 days Veea Inc is expected to generate 2.13 times more return on investment than Invesco Technology. However, Veea is 2.13 times more volatile than Invesco Technology Fund. It trades about 0.07 of its potential returns per unit of risk. Invesco Technology Fund is currently generating about -0.07 per unit of risk. If you would invest  350.00  in Veea Inc on October 6, 2024 and sell it today you would earn a total of  35.00  from holding Veea Inc or generate 10.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.62%
Values	Daily Returns

Veea Inc  vs.  Invesco Technology Fund

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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Invesco Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Technology Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Invesco Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Veea and Invesco Technology

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

The idea behind Veea Inc and Invesco Technology Fund 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.