Correlation Between VeChain and JUST

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

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

Diversification Opportunities for VeChain and JUST

0.93

Correlation Coefficient

VeChain  JUST

Almost no diversification

The 3 months correlation between VeChain and JUST is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding VeChain and JUST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JUST and VeChain 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 VeChain are associated (or correlated) with JUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JUST has no effect on the direction of VeChain i.e., VeChain and JUST go up and down completely randomly.

Pair Corralation between VeChain and JUST

Assuming the 90 days trading horizon VeChain is expected to generate 1.71 times more return on investment than JUST. However, VeChain is 1.71 times more volatile than JUST. It trades about 0.24 of its potential returns per unit of risk. JUST is currently generating about 0.16 per unit of risk. If you would invest  2.08  in VeChain on September 2, 2024 and sell it today you would earn a total of  2.51  from holding VeChain or generate 120.67% return on investment over 90 days.

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

VeChain  vs.  JUST

VeChain

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VeChain are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, VeChain exhibited solid returns over the last few months and may actually be approaching a breakup point.

JUST

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JUST are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, JUST exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VeChain and JUST

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

The idea behind VeChain and JUST 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.