Correlation Between VERB TECHNOLOGY and Borqs Technologies

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

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

Diversification Opportunities for VERB TECHNOLOGY and Borqs Technologies

0.45

Correlation Coefficient

VERB TECHNOLOGY  Borqs Technologies

Very weak diversification

The 3 months correlation between VERB and Borqs is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding VERB TECHNOLOGY PANY and Borqs Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borqs Technologies and VERB TECHNOLOGY 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 VERB TECHNOLOGY PANY are associated (or correlated) with Borqs Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borqs Technologies has no effect on the direction of VERB TECHNOLOGY i.e., VERB TECHNOLOGY and Borqs Technologies go up and down completely randomly.

Pair Corralation between VERB TECHNOLOGY and Borqs Technologies

Given the investment horizon of 90 days VERB TECHNOLOGY PANY is expected to under-perform the Borqs Technologies. In addition to that, VERB TECHNOLOGY is 3.31 times more volatile than Borqs Technologies. It trades about -0.01 of its total potential returns per unit of risk. Borqs Technologies is currently generating about 0.02 per unit of volatility. If you would invest  22.00  in Borqs Technologies on September 25, 2024 and sell it today you would lose (2.00) from holding Borqs Technologies or give up 9.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	27.97%
Values	Daily Returns

VERB TECHNOLOGY PANY  vs.  Borqs Technologies

VERB TECHNOLOGY PANY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VERB TECHNOLOGY PANY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, VERB TECHNOLOGY is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Borqs Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind VERB TECHNOLOGY PANY and Borqs Technologies 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.

Check out your portfolio center.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.