Correlation Between Velo3D and Perla Group

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Can any of the company-specific risk be diversified away by investing in both Velo3D and Perla Group 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 Velo3D and Perla Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Velo3D Inc and Perla Group International, you can compare the effects of market volatilities on Velo3D and Perla Group 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 Velo3D with a short position of Perla Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Velo3D and Perla Group.

Diversification Opportunities for Velo3D and Perla Group

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Velo3D and Perla is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Velo3D Inc and Perla Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perla Group International and Velo3D 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 Velo3D Inc are associated (or correlated) with Perla Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perla Group International has no effect on the direction of Velo3D i.e., Velo3D and Perla Group go up and down completely randomly.

Pair Corralation between Velo3D and Perla Group

Considering the 90-day investment horizon Velo3D Inc is expected to under-perform the Perla Group. But the stock apears to be less risky and, when comparing its historical volatility, Velo3D Inc is 9.99 times less risky than Perla Group. The stock trades about -0.07 of its potential returns per unit of risk. The Perla Group International is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Perla Group International on October 12, 2024 and sell it today you would lose (0.01) from holding Perla Group International or give up 50.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy30.07%
ValuesDaily Returns

Velo3D Inc  vs.  Perla Group International

 Performance 
       Timeline  
Velo3D Inc 

Risk-Adjusted Performance

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Over the last 90 days Velo3D Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Velo3D is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
Perla Group International 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Perla Group International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Perla Group is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Velo3D and Perla Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Velo3D and Perla Group

The main advantage of trading using opposite Velo3D and Perla Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Velo3D position performs unexpectedly, Perla Group 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 Perla Group will offset losses from the drop in Perla Group's long position.
The idea behind Velo3D Inc and Perla Group International 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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