Correlation Between Western Superconducting and By Health

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

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

Diversification Opportunities for Western Superconducting and By Health

0.39

Correlation Coefficient

Western Superconducting  By Health

Weak diversification

The 3 months correlation between Western and 300146 is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Western Superconducting Tech and By health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on By health and Western Superconducting 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 Western Superconducting Tech are associated (or correlated) with By Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of By health has no effect on the direction of Western Superconducting i.e., Western Superconducting and By Health go up and down completely randomly.

Pair Corralation between Western Superconducting and By Health

Assuming the 90 days trading horizon Western Superconducting Tech is expected to generate 2.03 times more return on investment than By Health. However, Western Superconducting is 2.03 times more volatile than By health. It trades about 0.27 of its potential returns per unit of risk. By health is currently generating about 0.12 per unit of risk. If you would invest  4,155  in Western Superconducting Tech on December 5, 2024 and sell it today you would earn a total of  602.00  from holding Western Superconducting Tech or generate 14.49% return on investment over 90 days.

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

Western Superconducting Tech  vs.  By health

Western Superconducting

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Western Superconducting Tech are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Western Superconducting may actually be approaching a critical reversion point that can send shares even higher in April 2025.

By health

Risk-Adjusted Performance

Very Weak

Over the last 90 days By health 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.

Pair Trading with Western Superconducting and By Health

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

The idea behind Western Superconducting Tech and By health 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.