Correlation Between Wells Fargo and Veea

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

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

Diversification Opportunities for Wells Fargo and Veea

-0.78

Correlation Coefficient

Wells Fargo  Veea

Pay attention - limited upside

The 3 months correlation between Wells and Veea is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Wells Fargo Advantage and Veea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veea Inc and Wells Fargo 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 Wells Fargo Advantage are associated (or correlated) with Veea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veea Inc has no effect on the direction of Wells Fargo i.e., Wells Fargo and Veea go up and down completely randomly.

Pair Corralation between Wells Fargo and Veea

Assuming the 90 days horizon Wells Fargo Advantage is expected to generate 0.02 times more return on investment than Veea. However, Wells Fargo Advantage is 41.0 times less risky than Veea. It trades about 0.11 of its potential returns per unit of risk. Veea Inc is currently generating about -0.29 per unit of risk. If you would invest  875.00  in Wells Fargo Advantage on December 20, 2024 and sell it today you would earn a total of  7.00  from holding Wells Fargo Advantage or generate 0.8% return on investment over 90 days.

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

Wells Fargo Advantage  vs.  Veea Inc

Wells Fargo Advantage

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wells Fargo Advantage are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Wells Fargo is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Veea Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Veea Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Wells Fargo and Veea

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

The idea behind Wells Fargo Advantage and Veea Inc 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.