Correlation Between Verra Mobility and TenX Keane

Can any of the company-specific risk be diversified away by investing in both Verra Mobility and TenX Keane 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 TenX Keane 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 TenX Keane Acquisition, you can compare the effects of market volatilities on Verra Mobility and TenX Keane 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 TenX Keane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verra Mobility and TenX Keane.

Diversification Opportunities for Verra Mobility and TenX Keane

-0.22

Correlation Coefficient

Verra Mobility  TenX Keane

Very good diversification

The 3 months correlation between Verra and TenX is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Verra Mobility Corp and TenX Keane Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TenX Keane Acquisition 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 TenX Keane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TenX Keane Acquisition has no effect on the direction of Verra Mobility i.e., Verra Mobility and TenX Keane go up and down completely randomly.

Pair Corralation between Verra Mobility and TenX Keane

Given the investment horizon of 90 days Verra Mobility is expected to generate 3.06 times less return on investment than TenX Keane. But when comparing it to its historical volatility, Verra Mobility Corp is 7.31 times less risky than TenX Keane. It trades about 0.07 of its potential returns per unit of risk. TenX Keane Acquisition is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,065  in TenX Keane Acquisition on September 19, 2024 and sell it today you would lose (1,065) from holding TenX Keane Acquisition or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	82.26%
Values	Daily Returns

Verra Mobility Corp  vs.  TenX Keane Acquisition

Verra Mobility Corp

Risk-Adjusted Performance

0 of 100

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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

TenX Keane Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TenX Keane Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, TenX Keane is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Verra Mobility and TenX Keane

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

The idea behind Verra Mobility Corp and TenX Keane Acquisition 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.