Correlation Between EPAM Systems and Peraso

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

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

Diversification Opportunities for EPAM Systems and Peraso

-0.86

Correlation Coefficient

EPAM Systems  Peraso

Pay attention - limited upside

The 3 months correlation between EPAM and Peraso is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding EPAM Systems and Peraso Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peraso Inc and EPAM Systems 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 EPAM Systems are associated (or correlated) with Peraso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peraso Inc has no effect on the direction of EPAM Systems i.e., EPAM Systems and Peraso go up and down completely randomly.

Pair Corralation between EPAM Systems and Peraso

Given the investment horizon of 90 days EPAM Systems is expected to generate 0.37 times more return on investment than Peraso. However, EPAM Systems is 2.68 times less risky than Peraso. It trades about 0.13 of its potential returns per unit of risk. Peraso Inc is currently generating about -0.04 per unit of risk. If you would invest  20,050  in EPAM Systems on September 4, 2024 and sell it today you would earn a total of  4,329  from holding EPAM Systems or generate 21.59% return on investment over 90 days.

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

EPAM Systems  vs.  Peraso Inc

EPAM Systems

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EPAM Systems are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, EPAM Systems displayed solid returns over the last few months and may actually be approaching a breakup point.

Peraso Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peraso Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Pair Trading with EPAM Systems and Peraso

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

The idea behind EPAM Systems and Peraso Inc 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.