Correlation Between VTEX and Smartsheet

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

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

Diversification Opportunities for VTEX and Smartsheet

-0.38

Correlation Coefficient

VTEX  Smartsheet

Very good diversification

The 3 months correlation between VTEX and Smartsheet is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding VTEX and Smartsheet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smartsheet 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 Smartsheet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smartsheet has no effect on the direction of VTEX i.e., VTEX and Smartsheet go up and down completely randomly.

Pair Corralation between VTEX and Smartsheet

Given the investment horizon of 90 days VTEX is expected to under-perform the Smartsheet. In addition to that, VTEX is 10.03 times more volatile than Smartsheet. It trades about -0.15 of its total potential returns per unit of risk. Smartsheet is currently generating about 0.08 per unit of volatility. If you would invest  5,536  in Smartsheet on September 25, 2024 and sell it today you would earn a total of  61.00  from holding Smartsheet or generate 1.1% return on investment over 90 days.

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

VTEX  vs.  Smartsheet

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 fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Smartsheet

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Smartsheet are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Smartsheet is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with VTEX and Smartsheet

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

The idea behind VTEX and Smartsheet 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.