Correlation Between Vecima Networks and Boxlight Corp

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

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

Diversification Opportunities for Vecima Networks and Boxlight Corp

0.75

Correlation Coefficient

Vecima Networks  Boxlight Corp

Poor diversification

The 3 months correlation between Vecima and Boxlight is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Vecima Networks and Boxlight Corp Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boxlight Corp Class and Vecima Networks 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 Vecima Networks are associated (or correlated) with Boxlight Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boxlight Corp Class has no effect on the direction of Vecima Networks i.e., Vecima Networks and Boxlight Corp go up and down completely randomly.

Pair Corralation between Vecima Networks and Boxlight Corp

Assuming the 90 days horizon Vecima Networks is expected to generate 0.67 times more return on investment than Boxlight Corp. However, Vecima Networks is 1.49 times less risky than Boxlight Corp. It trades about 0.01 of its potential returns per unit of risk. Boxlight Corp Class is currently generating about -0.06 per unit of risk. If you would invest  1,143  in Vecima Networks on October 6, 2024 and sell it today you would lose (32.00) from holding Vecima Networks or give up 2.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	60.19%
Values	Daily Returns

Vecima Networks  vs.  Boxlight Corp Class

Vecima Networks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vecima Networks has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Boxlight Corp Class

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Boxlight Corp Class are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Boxlight Corp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vecima Networks and Boxlight Corp

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

The idea behind Vecima Networks and Boxlight Corp Class 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.