Correlation Between Veeva Systems and M3

Can any of the company-specific risk be diversified away by investing in both Veeva Systems and M3 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 M3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Veeva Systems Class and M3 Inc, you can compare the effects of market volatilities on Veeva Systems and M3 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 M3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veeva Systems and M3.

Diversification Opportunities for Veeva Systems and M3

0.18

Correlation Coefficient

Veeva Systems  M3

Average diversification

The 3 months correlation between Veeva and M3 is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Veeva Systems Class and M3 Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M3 Inc 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 Class are associated (or correlated) with M3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M3 Inc has no effect on the direction of Veeva Systems i.e., Veeva Systems and M3 go up and down completely randomly.

Pair Corralation between Veeva Systems and M3

Given the investment horizon of 90 days Veeva Systems Class is expected to generate 0.74 times more return on investment than M3. However, Veeva Systems Class is 1.35 times less risky than M3. It trades about 0.09 of its potential returns per unit of risk. M3 Inc is currently generating about -0.01 per unit of risk. If you would invest  21,401  in Veeva Systems Class on December 27, 2024 and sell it today you would earn a total of  2,160  from holding Veeva Systems Class or generate 10.09% return on investment over 90 days.

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

Veeva Systems Class  vs.  M3 Inc

Veeva Systems Class

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Veeva Systems Class are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Veeva Systems may actually be approaching a critical reversion point that can send shares even higher in April 2025.

M3 Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days M3 Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, M3 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Veeva Systems and M3

The main advantage of trading using opposite Veeva Systems and M3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veeva Systems position performs unexpectedly, M3 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 M3 will offset losses from the drop in M3's long position.

The idea behind Veeva Systems Class and M3 Inc 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 CEOs Directory module to screen CEOs from public companies around the world.