Correlation Between Stic Investments and Wireless Power

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

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

Diversification Opportunities for Stic Investments and Wireless Power

-0.31

Correlation Coefficient

Stic Investments  Wireless Power

Very good diversification

The 3 months correlation between Stic and Wireless is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and Wireless Power Amplifier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Power Amplifier and Stic Investments 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 Stic Investments are associated (or correlated) with Wireless Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Power Amplifier has no effect on the direction of Stic Investments i.e., Stic Investments and Wireless Power go up and down completely randomly.

Pair Corralation between Stic Investments and Wireless Power

Assuming the 90 days trading horizon Stic Investments is expected to under-perform the Wireless Power. But the stock apears to be less risky and, when comparing its historical volatility, Stic Investments is 3.38 times less risky than Wireless Power. The stock trades about -0.07 of its potential returns per unit of risk. The Wireless Power Amplifier is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  258,500  in Wireless Power Amplifier on December 23, 2024 and sell it today you would earn a total of  125,000  from holding Wireless Power Amplifier or generate 48.36% return on investment over 90 days.

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

Stic Investments  vs.  Wireless Power Amplifier

Stic Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stic Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Wireless Power Amplifier

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wireless Power Amplifier are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wireless Power sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stic Investments and Wireless Power

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

The idea behind Stic Investments and Wireless Power Amplifier 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.