Correlation Between Verb Technology and NCR Atleos

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

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

Diversification Opportunities for Verb Technology and NCR Atleos

0.8

Correlation Coefficient

Verb Technology  NCR Atleos

Very poor diversification

The 3 months correlation between Verb and NCR is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Verb Technology and NCR Atleos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCR Atleos 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 are associated (or correlated) with NCR Atleos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCR Atleos has no effect on the direction of Verb Technology i.e., Verb Technology and NCR Atleos go up and down completely randomly.

Pair Corralation between Verb Technology and NCR Atleos

Given the investment horizon of 90 days Verb Technology is expected to generate 2.6 times more return on investment than NCR Atleos. However, Verb Technology is 2.6 times more volatile than NCR Atleos. It trades about -0.04 of its potential returns per unit of risk. NCR Atleos is currently generating about -0.21 per unit of risk. If you would invest  640.00  in Verb Technology on December 26, 2024 and sell it today you would lose (113.00) from holding Verb Technology or give up 17.66% of portfolio value over 90 days.

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

Verb Technology  vs.  NCR Atleos

Verb Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Verb Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

NCR Atleos

Risk-Adjusted Performance

Very Weak

Over the last 90 days NCR Atleos 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 basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Verb Technology and NCR Atleos

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

The idea behind Verb Technology and NCR Atleos 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.