Correlation Between VEON and Glory Star

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

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

Diversification Opportunities for VEON and Glory Star

-0.72

Correlation Coefficient

VEON  Glory Star

Pay attention - limited upside

The 3 months correlation between VEON and Glory is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding VEON and Glory Star New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glory Star New and VEON 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 VEON are associated (or correlated) with Glory Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glory Star New has no effect on the direction of VEON i.e., VEON and Glory Star go up and down completely randomly.

Pair Corralation between VEON and Glory Star

Given the investment horizon of 90 days VEON is expected to generate 0.2 times more return on investment than Glory Star. However, VEON is 4.96 times less risky than Glory Star. It trades about 0.07 of its potential returns per unit of risk. Glory Star New is currently generating about -0.22 per unit of risk. If you would invest  3,021  in VEON on August 7, 2024 and sell it today you would earn a total of  89.00  from holding VEON or generate 2.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	86.36%
Values	Daily Returns

VEON  vs.  Glory Star New

VEON

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VEON are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, VEON displayed solid returns over the last few months and may actually be approaching a breakup point.

Glory Star New

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Glory Star New are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Glory Star showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VEON and Glory Star

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

The idea behind VEON and Glory Star New 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.