Correlation Between Verint Systems and U BX

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

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

Diversification Opportunities for Verint Systems and U BX

0.73

Correlation Coefficient

Verint Systems  U BX

Poor diversification

The 3 months correlation between Verint and UBXG is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Verint Systems and U BX Technology Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U BX Technology and Verint 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 Verint Systems are associated (or correlated) with U BX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U BX Technology has no effect on the direction of Verint Systems i.e., Verint Systems and U BX go up and down completely randomly.

Pair Corralation between Verint Systems and U BX

Given the investment horizon of 90 days Verint Systems is expected to generate 80.23 times less return on investment than U BX. But when comparing it to its historical volatility, Verint Systems is 34.04 times less risky than U BX. It trades about 0.05 of its potential returns per unit of risk. U BX Technology Ltd is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  68.00  in U BX Technology Ltd on September 21, 2024 and sell it today you would earn a total of  271.00  from holding U BX Technology Ltd or generate 398.53% return on investment over 90 days.

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

Verint Systems  vs.  U BX Technology Ltd

Verint Systems

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Verint Systems are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Verint Systems may actually be approaching a critical reversion point that can send shares even higher in January 2025.

U BX Technology

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in U BX Technology Ltd are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, U BX reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Verint Systems and U BX

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

The idea behind Verint Systems and U BX Technology Ltd 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.