Correlation Between Value Capital and Perion Network

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

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

Diversification Opportunities for Value Capital and Perion Network

-0.02

Correlation Coefficient

Value Capital  Perion Network

Good diversification

The 3 months correlation between Value and Perion is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Value Capital One and Perion Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perion Network and Value Capital 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 Value Capital One are associated (or correlated) with Perion Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perion Network has no effect on the direction of Value Capital i.e., Value Capital and Perion Network go up and down completely randomly.

Pair Corralation between Value Capital and Perion Network

Assuming the 90 days trading horizon Value Capital One is expected to generate 1.24 times more return on investment than Perion Network. However, Value Capital is 1.24 times more volatile than Perion Network. It trades about 0.19 of its potential returns per unit of risk. Perion Network is currently generating about 0.13 per unit of risk. If you would invest  3,770  in Value Capital One on April 23, 2025 and sell it today you would earn a total of  1,230  from holding Value Capital One or generate 32.63% return on investment over 90 days.

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

Value Capital One  vs.  Perion Network

Value Capital One

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Value Capital One are ranked lower than 14 (%) 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.

Perion Network

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perion Network are ranked lower than 9 (%) 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.

Pair Trading with Value Capital and Perion Network

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

The idea behind Value Capital One and Perion Network 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.