Correlation Between VNET Group and Network 1

Can any of the company-specific risk be diversified away by investing in both VNET Group and Network 1 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 VNET Group and Network 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VNET Group DRC and Network 1 Technologies, you can compare the effects of market volatilities on VNET Group and Network 1 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 VNET Group with a short position of Network 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of VNET Group and Network 1.

Diversification Opportunities for VNET Group and Network 1

0.77

Correlation Coefficient

VNET Group  Network 1

Poor diversification

The 3 months correlation between VNET and Network is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding VNET Group DRC and Network 1 Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network 1 Technologies and VNET Group 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 VNET Group DRC are associated (or correlated) with Network 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network 1 Technologies has no effect on the direction of VNET Group i.e., VNET Group and Network 1 go up and down completely randomly.

Pair Corralation between VNET Group and Network 1

Given the investment horizon of 90 days VNET Group DRC is expected to under-perform the Network 1. In addition to that, VNET Group is 2.75 times more volatile than Network 1 Technologies. It trades about -0.16 of its total potential returns per unit of risk. Network 1 Technologies is currently generating about -0.04 per unit of volatility. If you would invest  142.00  in Network 1 Technologies on May 19, 2025 and sell it today you would lose (2.00) from holding Network 1 Technologies or give up 1.41% of portfolio value over 90 days.

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

VNET Group DRC  vs.  Network 1 Technologies

VNET Group DRC

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in VNET Group DRC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, VNET Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Network 1 Technologies

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Network 1 Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Network 1 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VNET Group and Network 1

The main advantage of trading using opposite VNET Group and Network 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VNET Group position performs unexpectedly, Network 1 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 Network 1 will offset losses from the drop in Network 1's long position.

The idea behind VNET Group DRC and Network 1 Technologies 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.