Correlation Between Verra Mobility and Kerry Logistics

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

By analyzing existing cross correlation between Verra Mobility Corp and Kerry Logistics Network, you can compare the effects of market volatilities on Verra Mobility and Kerry Logistics 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 Verra Mobility with a short position of Kerry Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verra Mobility and Kerry Logistics.

Diversification Opportunities for Verra Mobility and Kerry Logistics

-0.01

Correlation Coefficient

Verra Mobility  Kerry Logistics

Good diversification

The 3 months correlation between Verra and Kerry is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Verra Mobility Corp and Kerry Logistics Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerry Logistics Network and Verra Mobility 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 Verra Mobility Corp are associated (or correlated) with Kerry Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerry Logistics Network has no effect on the direction of Verra Mobility i.e., Verra Mobility and Kerry Logistics go up and down completely randomly.

Pair Corralation between Verra Mobility and Kerry Logistics

Given the investment horizon of 90 days Verra Mobility Corp is expected to generate 0.81 times more return on investment than Kerry Logistics. However, Verra Mobility Corp is 1.24 times less risky than Kerry Logistics. It trades about -0.11 of its potential returns per unit of risk. Kerry Logistics Network is currently generating about -0.13 per unit of risk. If you would invest  2,410  in Verra Mobility Corp on December 28, 2024 and sell it today you would lose (330.00) from holding Verra Mobility Corp or give up 13.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Verra Mobility Corp  vs.  Kerry Logistics Network

Verra Mobility Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Verra Mobility Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Kerry Logistics Network

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kerry Logistics Network 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 basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Verra Mobility and Kerry Logistics

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

The idea behind Verra Mobility Corp and Kerry Logistics Network 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.