Correlation Between Verizon Communications and Collegeadvantage

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

By analyzing existing cross correlation between Verizon Communications and Collegeadvantage 529 Savings, you can compare the effects of market volatilities on Verizon Communications and Collegeadvantage 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 Verizon Communications with a short position of Collegeadvantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verizon Communications and Collegeadvantage.

Diversification Opportunities for Verizon Communications and Collegeadvantage

-0.78

Correlation Coefficient

Verizon Communications  Collegeadvantage

Pay attention - limited upside

The 3 months correlation between Verizon and Collegeadvantage is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and Collegeadvantage 529 Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collegeadvantage 529 and Verizon Communications 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 Verizon Communications are associated (or correlated) with Collegeadvantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collegeadvantage 529 has no effect on the direction of Verizon Communications i.e., Verizon Communications and Collegeadvantage go up and down completely randomly.

Pair Corralation between Verizon Communications and Collegeadvantage

Allowing for the 90-day total investment horizon Verizon Communications is expected to generate 0.94 times more return on investment than Collegeadvantage. However, Verizon Communications is 1.06 times less risky than Collegeadvantage. It trades about 0.12 of its potential returns per unit of risk. Collegeadvantage 529 Savings is currently generating about -0.1 per unit of risk. If you would invest  3,924  in Verizon Communications on December 25, 2024 and sell it today you would earn a total of  432.00  from holding Verizon Communications or generate 11.01% return on investment over 90 days.

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

Verizon Communications  vs.  Collegeadvantage 529 Savings

Verizon Communications

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Verizon Communications are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Verizon Communications may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Collegeadvantage 529

Risk-Adjusted Performance

Very Weak

Over the last 90 days Collegeadvantage 529 Savings has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Verizon Communications and Collegeadvantage

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

The idea behind Verizon Communications and Collegeadvantage 529 Savings 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.