Correlation Between Verisk Analytics and Pitney Bowes

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

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

Diversification Opportunities for Verisk Analytics and Pitney Bowes

-0.16

Correlation Coefficient

Verisk Analytics  Pitney Bowes

Good diversification

The 3 months correlation between Verisk and Pitney is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Verisk Analytics and Pitney Bowes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pitney Bowes and Verisk Analytics 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 Verisk Analytics are associated (or correlated) with Pitney Bowes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pitney Bowes has no effect on the direction of Verisk Analytics i.e., Verisk Analytics and Pitney Bowes go up and down completely randomly.

Pair Corralation between Verisk Analytics and Pitney Bowes

Given the investment horizon of 90 days Verisk Analytics is expected to generate 1.11 times less return on investment than Pitney Bowes. But when comparing it to its historical volatility, Verisk Analytics is 2.49 times less risky than Pitney Bowes. It trades about 0.03 of its potential returns per unit of risk. Pitney Bowes is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  458.00  in Pitney Bowes on January 24, 2024 and sell it today you would lose (38.00) from holding Pitney Bowes or give up 8.3% of portfolio value over 90 days.

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

Verisk Analytics  vs.  Pitney Bowes

Verisk Analytics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Verisk Analytics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pitney Bowes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pitney Bowes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Pitney Bowes is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Verisk Analytics and Pitney Bowes

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

The idea behind Verisk Analytics and Pitney Bowes 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.