Correlation Between WPG Holdings and Wayi International

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

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

Diversification Opportunities for WPG Holdings and Wayi International

0.12

Correlation Coefficient

WPG Holdings  Wayi International

Average diversification

The 3 months correlation between WPG and Wayi is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding WPG Holdings and Wayi International Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayi International and WPG Holdings 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 WPG Holdings are associated (or correlated) with Wayi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayi International has no effect on the direction of WPG Holdings i.e., WPG Holdings and Wayi International go up and down completely randomly.

Pair Corralation between WPG Holdings and Wayi International

If you would invest  15,250  in Wayi International Digital on December 29, 2024 and sell it today you would earn a total of  900.00  from holding Wayi International Digital or generate 5.9% return on investment over 90 days.

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

WPG Holdings  vs.  Wayi International Digital

WPG Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days WPG Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, WPG Holdings is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Wayi International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wayi International Digital are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Wayi International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with WPG Holdings and Wayi International

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

The idea behind WPG Holdings and Wayi International Digital 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.