Correlation Between Verint Systems and Nova

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

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

Diversification Opportunities for Verint Systems and Nova

0.81

Correlation Coefficient

Verint Systems  Nova

Very poor diversification

The 3 months correlation between Verint and Nova is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Verint Systems and Nova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova and Verint Systems 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 Verint Systems are associated (or correlated) with Nova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova has no effect on the direction of Verint Systems i.e., Verint Systems and Nova go up and down completely randomly.

Pair Corralation between Verint Systems and Nova

Given the investment horizon of 90 days Verint Systems is expected to generate 1.86 times less return on investment than Nova. In addition to that, Verint Systems is 1.14 times more volatile than Nova. It trades about 0.09 of its total potential returns per unit of risk. Nova is currently generating about 0.19 per unit of volatility. If you would invest  19,388  in Nova on May 6, 2025 and sell it today you would earn a total of  7,517  from holding Nova or generate 38.77% return on investment over 90 days.

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

Verint Systems  vs.  Nova

Verint Systems

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Verint Systems are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Verint Systems unveiled solid returns over the last few months and may actually be approaching a breakup point.

Nova

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nova are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain primary indicators, Nova demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Verint Systems and Nova

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

The idea behind Verint Systems and Nova 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.

Check out your portfolio center.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.