Correlation Between Veritone and Akamai Technologies

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

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

Diversification Opportunities for Veritone and Akamai Technologies

0.64

Correlation Coefficient

Veritone  Akamai Technologies

Poor diversification

The 3 months correlation between Veritone and Akamai is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Veritone and Akamai Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akamai Technologies and Veritone 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 Veritone are associated (or correlated) with Akamai Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akamai Technologies has no effect on the direction of Veritone i.e., Veritone and Akamai Technologies go up and down completely randomly.

Pair Corralation between Veritone and Akamai Technologies

Given the investment horizon of 90 days Veritone is expected to under-perform the Akamai Technologies. In addition to that, Veritone is 2.89 times more volatile than Akamai Technologies. It trades about -0.03 of its total potential returns per unit of risk. Akamai Technologies is currently generating about 0.02 per unit of volatility. If you would invest  9,730  in Akamai Technologies on September 12, 2024 and sell it today you would earn a total of  148.00  from holding Akamai Technologies or generate 1.52% return on investment over 90 days.

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

Veritone  vs.  Akamai Technologies

Veritone

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veritone has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Akamai Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Akamai Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Akamai Technologies is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Veritone and Akamai Technologies

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

The idea behind Veritone and Akamai 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.