Correlation Between VEON and Wereldhave

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

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

Diversification Opportunities for VEON and Wereldhave

-0.61

Correlation Coefficient

VEON  Wereldhave

Excellent diversification

The 3 months correlation between VEON and Wereldhave is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding VEON and Wereldhave NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wereldhave NV and VEON 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 VEON are associated (or correlated) with Wereldhave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wereldhave NV has no effect on the direction of VEON i.e., VEON and Wereldhave go up and down completely randomly.

Pair Corralation between VEON and Wereldhave

Assuming the 90 days trading horizon VEON is expected to generate 3.26 times more return on investment than Wereldhave. However, VEON is 3.26 times more volatile than Wereldhave NV. It trades about 0.13 of its potential returns per unit of risk. Wereldhave NV is currently generating about -0.01 per unit of risk. If you would invest  97.00  in VEON on August 30, 2024 and sell it today you would earn a total of  22.00  from holding VEON or generate 22.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

VEON  vs.  Wereldhave NV

VEON

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VEON are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VEON unveiled solid returns over the last few months and may actually be approaching a breakup point.

Wereldhave NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wereldhave NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Wereldhave 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 VEON and Wereldhave

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

The idea behind VEON and Wereldhave NV 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.