Correlation Between Veea and Baron Small

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

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

Diversification Opportunities for Veea and Baron Small

-0.2

Correlation Coefficient

Veea  Baron Small

Good diversification

The 3 months correlation between Veea and Baron is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Veea Inc and Baron Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Small Cap and Veea 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 Veea Inc are associated (or correlated) with Baron Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Small Cap has no effect on the direction of Veea i.e., Veea and Baron Small go up and down completely randomly.

Pair Corralation between Veea and Baron Small

Given the investment horizon of 90 days Veea Inc is expected to under-perform the Baron Small. In addition to that, Veea is 17.98 times more volatile than Baron Small Cap. It trades about -0.05 of its total potential returns per unit of risk. Baron Small Cap is currently generating about 0.09 per unit of volatility. If you would invest  3,316  in Baron Small Cap on August 29, 2024 and sell it today you would earn a total of  710.00  from holding Baron Small Cap or generate 21.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	26.32%
Values	Daily Returns

Veea Inc  vs.  Baron Small Cap

Veea Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veea Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Baron Small Cap

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Baron Small Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Baron Small may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Veea and Baron Small

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

The idea behind Veea Inc and Baron Small Cap 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 Global Correlations module to find global opportunities by holding instruments from different markets.