Correlation Between WIMFARM SA and SPORT LISBOA

Can any of the company-specific risk be diversified away by investing in both WIMFARM SA and SPORT LISBOA 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 WIMFARM SA and SPORT LISBOA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WIMFARM SA EO and SPORT LISBOA E, you can compare the effects of market volatilities on WIMFARM SA and SPORT LISBOA 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 WIMFARM SA with a short position of SPORT LISBOA. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and SPORT LISBOA.

Diversification Opportunities for WIMFARM SA and SPORT LISBOA

0.0

Correlation Coefficient

WIMFARM SA  SPORT LISBOA

Pay attention - limited upside

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

Pair Corralation between WIMFARM SA and SPORT LISBOA

Assuming the 90 days horizon WIMFARM SA EO is expected to generate 1.53 times more return on investment than SPORT LISBOA. However, WIMFARM SA is 1.53 times more volatile than SPORT LISBOA E. It trades about 0.1 of its potential returns per unit of risk. SPORT LISBOA E is currently generating about 0.02 per unit of risk. If you would invest  315.00  in WIMFARM SA EO on December 21, 2024 and sell it today you would earn a total of  85.00  from holding WIMFARM SA EO or generate 26.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

WIMFARM SA EO  vs.  SPORT LISBOA E

WIMFARM SA EO

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in WIMFARM SA EO are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, WIMFARM SA reported solid returns over the last few months and may actually be approaching a breakup point.

SPORT LISBOA E

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPORT LISBOA E are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SPORT LISBOA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with WIMFARM SA and SPORT LISBOA

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

The idea behind WIMFARM SA EO and SPORT LISBOA E 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.