Correlation Between VTEX and Intuit

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

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

Diversification Opportunities for VTEX and Intuit

-0.51

Correlation Coefficient

VTEX  Intuit

Excellent diversification

The 3 months correlation between VTEX and Intuit is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding VTEX and Intuit Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuit Inc and VTEX 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 VTEX are associated (or correlated) with Intuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuit Inc has no effect on the direction of VTEX i.e., VTEX and Intuit go up and down completely randomly.

Pair Corralation between VTEX and Intuit

Given the investment horizon of 90 days VTEX is expected to under-perform the Intuit. In addition to that, VTEX is 1.1 times more volatile than Intuit Inc. It trades about -0.05 of its total potential returns per unit of risk. Intuit Inc is currently generating about 0.03 per unit of volatility. If you would invest  62,376  in Intuit Inc on September 3, 2024 and sell it today you would earn a total of  1,797  from holding Intuit Inc or generate 2.88% return on investment over 90 days.

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

VTEX  vs.  Intuit Inc

VTEX

Risk-Adjusted Performance

0 of 100

Very Weak

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

Intuit Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intuit Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Intuit is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with VTEX and Intuit

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

The idea behind VTEX and Intuit 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.