Correlation Between Veritone and ATIF Holdings

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

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

Diversification Opportunities for Veritone and ATIF Holdings

0.6

Correlation Coefficient

Veritone  ATIF Holdings

Poor diversification

The 3 months correlation between Veritone and ATIF is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Veritone and ATIF Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATIF Holdings and Veritone 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 Veritone are associated (or correlated) with ATIF Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATIF Holdings has no effect on the direction of Veritone i.e., Veritone and ATIF Holdings go up and down completely randomly.

Pair Corralation between Veritone and ATIF Holdings

Given the investment horizon of 90 days Veritone is expected to under-perform the ATIF Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Veritone is 1.53 times less risky than ATIF Holdings. The stock trades about -0.04 of its potential returns per unit of risk. The ATIF Holdings is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  105.00  in ATIF Holdings on September 12, 2024 and sell it today you would lose (31.00) from holding ATIF Holdings or give up 29.52% of portfolio value over 90 days.

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

Veritone  vs.  ATIF Holdings

Veritone

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veritone has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

ATIF Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATIF Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Veritone and ATIF Holdings

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

The idea behind Veritone and ATIF Holdings 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.