Correlation Between Gentex and Veea

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

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

Diversification Opportunities for Gentex and Veea

-0.15

Correlation Coefficient

Gentex  Veea

Good diversification

The 3 months correlation between Gentex and Veea is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Veea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veea Inc and Gentex 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 Gentex are associated (or correlated) with Veea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veea Inc has no effect on the direction of Gentex i.e., Gentex and Veea go up and down completely randomly.

Pair Corralation between Gentex and Veea

Given the investment horizon of 90 days Gentex is expected to under-perform the Veea. But the stock apears to be less risky and, when comparing its historical volatility, Gentex is 6.36 times less risky than Veea. The stock trades about -0.25 of its potential returns per unit of risk. The Veea Inc is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  250.00  in Veea Inc on September 25, 2024 and sell it today you would earn a total of  126.00  from holding Veea Inc or generate 50.4% return on investment over 90 days.

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

Gentex  vs.  Veea Inc

Gentex

Risk-Adjusted Performance

0 of 100

Very Weak

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

Veea Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veea Inc 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 technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Gentex and Veea

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

The idea behind Gentex and Veea 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.