Correlation Between Veeco Instruments and Euroseas

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

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

Diversification Opportunities for Veeco Instruments and Euroseas

0.67

Correlation Coefficient

Veeco Instruments  Euroseas

Poor diversification

The 3 months correlation between Veeco and Euroseas is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Veeco Instruments and Euroseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euroseas and Veeco Instruments 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 Veeco Instruments are associated (or correlated) with Euroseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euroseas has no effect on the direction of Veeco Instruments i.e., Veeco Instruments and Euroseas go up and down completely randomly.

Pair Corralation between Veeco Instruments and Euroseas

Given the investment horizon of 90 days Veeco Instruments is expected to generate 3.67 times less return on investment than Euroseas. In addition to that, Veeco Instruments is 1.28 times more volatile than Euroseas. It trades about 0.07 of its total potential returns per unit of risk. Euroseas is currently generating about 0.32 per unit of volatility. If you would invest  3,433  in Euroseas on May 7, 2025 and sell it today you would earn a total of  1,704  from holding Euroseas or generate 49.64% return on investment over 90 days.

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

Veeco Instruments  vs.  Euroseas

Veeco Instruments

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Veeco Instruments are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Veeco Instruments may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Euroseas

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Euroseas are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Euroseas sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Veeco Instruments and Euroseas

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

The idea behind Veeco Instruments and Euroseas 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.