Correlation Between Perion Network and Value Capital

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

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

Diversification Opportunities for Perion Network and Value Capital

0.03

Correlation Coefficient

Perion Network  Value Capital

Significant diversification

The 3 months correlation between Perion and Value is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Perion Network and Value Capital One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Capital One and Perion Network 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 Perion Network are associated (or correlated) with Value Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Capital One has no effect on the direction of Perion Network i.e., Perion Network and Value Capital go up and down completely randomly.

Pair Corralation between Perion Network and Value Capital

Assuming the 90 days trading horizon Perion Network is expected to generate 1.46 times less return on investment than Value Capital. But when comparing it to its historical volatility, Perion Network is 1.24 times less risky than Value Capital. It trades about 0.14 of its potential returns per unit of risk. Value Capital One is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  3,960  in Value Capital One on April 24, 2025 and sell it today you would earn a total of  1,110  from holding Value Capital One or generate 28.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.96%
Values	Daily Returns

Perion Network  vs.  Value Capital One

Perion Network

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Perion Network are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Perion Network sustained solid returns over the last few months and may actually be approaching a breakup point.

Value Capital One

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Value Capital One are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Value Capital sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perion Network and Value Capital

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

The idea behind Perion Network and Value Capital One 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.