Correlation Between VEON and Disney

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

By analyzing existing cross correlation between VEON and Walt Disney, you can compare the effects of market volatilities on VEON and Disney 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 Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of VEON and Disney.

Diversification Opportunities for VEON and Disney

-0.89

Correlation Coefficient

VEON  Disney

Pay attention - limited upside

The 3 months correlation between VEON and Disney is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding VEON and Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney 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 Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of VEON i.e., VEON and Disney go up and down completely randomly.

Pair Corralation between VEON and Disney

Given the investment horizon of 90 days VEON is expected to generate 1.9 times more return on investment than Disney. However, VEON is 1.9 times more volatile than Walt Disney. It trades about 0.07 of its potential returns per unit of risk. Walt Disney is currently generating about -0.06 per unit of risk. If you would invest  2,553  in VEON on March 22, 2024 and sell it today you would earn a total of  77.00  from holding VEON or generate 3.02% return on investment over 90 days.

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

VEON  vs.  Walt Disney

VEON

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VEON are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, VEON may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Walt Disney

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Walt Disney has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with VEON and Disney

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

The idea behind VEON and Walt Disney 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.