Correlation Between INNELEC MULTIMMINHEO153 and Wayside Technology

Can any of the company-specific risk be diversified away by investing in both INNELEC MULTIMMINHEO153 and Wayside Technology 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 INNELEC MULTIMMINHEO153 and Wayside Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between INNELEC MULTIMMINHEO153 and Wayside Technology Group, you can compare the effects of market volatilities on INNELEC MULTIMMINHEO153 and Wayside Technology 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 INNELEC MULTIMMINHEO153 with a short position of Wayside Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNELEC MULTIMMINHEO153 and Wayside Technology.

Diversification Opportunities for INNELEC MULTIMMINHEO153 and Wayside Technology

-0.74

Correlation Coefficient

INNELEC MULTIMMINHEO153  Wayside Technology

Pay attention - limited upside

The 3 months correlation between INNELEC and Wayside is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding INNELEC MULTIMMINHEO153 and Wayside Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayside Technology and INNELEC MULTIMMINHEO153 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 INNELEC MULTIMMINHEO153 are associated (or correlated) with Wayside Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayside Technology has no effect on the direction of INNELEC MULTIMMINHEO153 i.e., INNELEC MULTIMMINHEO153 and Wayside Technology go up and down completely randomly.

Pair Corralation between INNELEC MULTIMMINHEO153 and Wayside Technology

Assuming the 90 days horizon INNELEC MULTIMMINHEO153 is expected to under-perform the Wayside Technology. But the stock apears to be less risky and, when comparing its historical volatility, INNELEC MULTIMMINHEO153 is 1.23 times less risky than Wayside Technology. The stock trades about -0.23 of its potential returns per unit of risk. The Wayside Technology Group is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  8,488  in Wayside Technology Group on September 2, 2024 and sell it today you would earn a total of  4,112  from holding Wayside Technology Group or generate 48.44% return on investment over 90 days.

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

INNELEC MULTIMMINHEO153  vs.  Wayside Technology Group

INNELEC MULTIMMINHEO153

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INNELEC MULTIMMINHEO153 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Wayside Technology

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wayside Technology Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Wayside Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INNELEC MULTIMMINHEO153 and Wayside Technology

The main advantage of trading using opposite INNELEC MULTIMMINHEO153 and Wayside Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INNELEC MULTIMMINHEO153 position performs unexpectedly, Wayside Technology 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 Wayside Technology will offset losses from the drop in Wayside Technology's long position.

The idea behind INNELEC MULTIMMINHEO153 and Wayside Technology Group 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.