Correlation Between VerifyMe and Wrap Technologies

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

Diversification Opportunities for VerifyMe and Wrap Technologies

0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between VerifyMe and Wrap is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding VerifyMe and Wrap Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wrap Technologies and VerifyMe 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 VerifyMe are associated (or correlated) with Wrap Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wrap Technologies has no effect on the direction of VerifyMe i.e., VerifyMe and Wrap Technologies go up and down completely randomly.

Pair Corralation between VerifyMe and Wrap Technologies

Given the investment horizon of 90 days VerifyMe is expected to under-perform the Wrap Technologies. But the stock apears to be less risky and, when comparing its historical volatility, VerifyMe is 1.06 times less risky than Wrap Technologies. The stock trades about -0.54 of its potential returns per unit of risk. The Wrap Technologies is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  203.00  in Wrap Technologies on November 28, 2024 and sell it today you would lose (16.00) from holding Wrap Technologies or give up 7.88% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

VerifyMe  vs.  Wrap Technologies

 Performance 
       Timeline  
VerifyMe 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in VerifyMe are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, VerifyMe exhibited solid returns over the last few months and may actually be approaching a breakup point.
Wrap Technologies 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Wrap Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Wrap Technologies may actually be approaching a critical reversion point that can send shares even higher in March 2025.

VerifyMe and Wrap Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with VerifyMe and Wrap Technologies

The main advantage of trading using opposite VerifyMe and Wrap Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VerifyMe position performs unexpectedly, Wrap 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 Wrap Technologies will offset losses from the drop in Wrap Technologies' long position.
The idea behind VerifyMe and Wrap 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.
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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