Correlation Between VEON and Brunel International

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

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

Diversification Opportunities for VEON and Brunel International

0.05

Correlation Coefficient

VEON  Brunel International

Significant diversification

The 3 months correlation between VEON and Brunel is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding VEON and Brunel International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunel International and VEON 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 VEON are associated (or correlated) with Brunel International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunel International has no effect on the direction of VEON i.e., VEON and Brunel International go up and down completely randomly.

Pair Corralation between VEON and Brunel International

Assuming the 90 days trading horizon VEON is expected to generate 2.59 times more return on investment than Brunel International. However, VEON is 2.59 times more volatile than Brunel International NV. It trades about 0.13 of its potential returns per unit of risk. Brunel International NV is currently generating about 0.0 per unit of risk. If you would invest  100.00  in VEON on September 19, 2024 and sell it today you would earn a total of  19.00  from holding VEON or generate 19.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	75.0%
Values	Daily Returns

VEON  vs.  Brunel International NV

VEON

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days VEON has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain basic indicators, VEON unveiled solid returns over the last few months and may actually be approaching a breakup point.

Brunel International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brunel International NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Brunel International 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 VEON and Brunel International

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

The idea behind VEON and Brunel International NV 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.