Correlation Between VTEX and Fair Isaac

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

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

Diversification Opportunities for VTEX and Fair Isaac

-0.58

Correlation Coefficient

VTEX  Fair Isaac

Excellent diversification

The 3 months correlation between VTEX and Fair is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding VTEX and Fair Isaac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Isaac and VTEX 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 VTEX are associated (or correlated) with Fair Isaac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Isaac has no effect on the direction of VTEX i.e., VTEX and Fair Isaac go up and down completely randomly.

Pair Corralation between VTEX and Fair Isaac

Given the investment horizon of 90 days VTEX is expected to under-perform the Fair Isaac. In addition to that, VTEX is 1.44 times more volatile than Fair Isaac. It trades about -0.01 of its total potential returns per unit of risk. Fair Isaac is currently generating about 0.29 per unit of volatility. If you would invest  129,382  in Fair Isaac on August 31, 2024 and sell it today you would earn a total of  106,018  from holding Fair Isaac or generate 81.94% return on investment over 90 days.

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

VTEX  vs.  Fair Isaac

VTEX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VTEX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, VTEX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Fair Isaac

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fair Isaac are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Fair Isaac displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VTEX and Fair Isaac

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

The idea behind VTEX and Fair Isaac 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.