Correlation Between Renren and VeriSign
Can any of the company-specific risk be diversified away by investing in both Renren and VeriSign 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 Renren and VeriSign into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renren Inc and VeriSign, you can compare the effects of market volatilities on Renren and VeriSign 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 Renren with a short position of VeriSign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renren and VeriSign.
Diversification Opportunities for Renren and VeriSign
Very good diversification
The 3 months correlation between Renren and VeriSign is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Renren Inc and VeriSign in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VeriSign and Renren 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 Renren Inc are associated (or correlated) with VeriSign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VeriSign has no effect on the direction of Renren i.e., Renren and VeriSign go up and down completely randomly.
Pair Corralation between Renren and VeriSign
Given the investment horizon of 90 days Renren Inc is expected to generate 4.46 times more return on investment than VeriSign. However, Renren is 4.46 times more volatile than VeriSign. It trades about -0.01 of its potential returns per unit of risk. VeriSign is currently generating about -0.05 per unit of risk. If you would invest 133.00 in Renren Inc on January 18, 2024 and sell it today you would lose (16.00) from holding Renren Inc or give up 12.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 34.68% |
| Values | Daily Returns |
Renren Inc vs. VeriSign
Performance |
| Timeline |
| Renren Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| VeriSign |
Renren and VeriSign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renren and VeriSign
The main advantage of trading using opposite Renren and VeriSign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renren position performs unexpectedly, VeriSign 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 VeriSign will offset losses from the drop in VeriSign's long position.| Renren vs. Lytus Technologies Holdings | Renren vs. GSE Systems | Renren vs. Auddia Inc | Renren vs. OLB Group |
| VeriSign vs. Crowdstrike Holdings | VeriSign vs. Cloudflare | VeriSign vs. Palo Alto Networks | VeriSign vs. Zscaler |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Commodity Directory Find actively traded commodities issued by global exchanges |