Correlation Between Ravad and Perion Network

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

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

Diversification Opportunities for Ravad and Perion Network

0.25

Correlation Coefficient

Ravad  Perion Network

Modest diversification

The 3 months correlation between Ravad and Perion is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ravad and Perion Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perion Network and Ravad 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 Ravad 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 Ravad i.e., Ravad and Perion Network go up and down completely randomly.

Pair Corralation between Ravad and Perion Network

Assuming the 90 days trading horizon Ravad is expected to generate 1.4 times less return on investment than Perion Network. But when comparing it to its historical volatility, Ravad is 1.14 times less risky than Perion Network. It trades about 0.1 of its potential returns per unit of risk. Perion Network is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  324,200  in Perion Network on April 23, 2025 and sell it today you would earn a total of  53,300  from holding Perion Network or generate 16.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ravad  vs.  Perion Network

Ravad

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ravad are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ravad 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 Ravad and Perion Network

The main advantage of trading using opposite Ravad and Perion Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ravad 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 Ravad 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.