Correlation Between WPG Holdings and CVC Technologies

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

By analyzing existing cross correlation between WPG Holdings and CVC Technologies, you can compare the effects of market volatilities on WPG Holdings and CVC Technologies 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 CVC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of WPG Holdings and CVC Technologies.

Diversification Opportunities for WPG Holdings and CVC Technologies

0.0

Correlation Coefficient

WPG Holdings  CVC Technologies

Pay attention - limited upside

The 3 months correlation between WPG and CVC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WPG Holdings and CVC Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVC Technologies 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 CVC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVC Technologies has no effect on the direction of WPG Holdings i.e., WPG Holdings and CVC Technologies go up and down completely randomly.

Pair Corralation between WPG Holdings and CVC Technologies

If you would invest  2,045  in CVC Technologies on October 6, 2024 and sell it today you would earn a total of  270.00  from holding CVC Technologies or generate 13.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

WPG Holdings  vs.  CVC Technologies

WPG Holdings

Risk-Adjusted Performance

0 of 100

Good

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

CVC Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CVC Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, CVC Technologies is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with WPG Holdings and CVC Technologies

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

The idea behind WPG Holdings and CVC Technologies 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.