Correlation Between 88 Energy and Weiss Korea

Can any of the company-specific risk be diversified away by investing in both 88 Energy and Weiss Korea 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 88 Energy and Weiss Korea into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 88 Energy and Weiss Korea Opportunity, you can compare the effects of market volatilities on 88 Energy and Weiss Korea 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 88 Energy with a short position of Weiss Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of 88 Energy and Weiss Korea.

Diversification Opportunities for 88 Energy and Weiss Korea

-0.36

Correlation Coefficient

88 Energy  Weiss Korea

Very good diversification

The 3 months correlation between 88E and Weiss is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding 88 Energy and Weiss Korea Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weiss Korea Opportunity and 88 Energy 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 88 Energy are associated (or correlated) with Weiss Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weiss Korea Opportunity has no effect on the direction of 88 Energy i.e., 88 Energy and Weiss Korea go up and down completely randomly.

Pair Corralation between 88 Energy and Weiss Korea

Assuming the 90 days trading horizon 88 Energy is expected to under-perform the Weiss Korea. But the stock apears to be less risky and, when comparing its historical volatility, 88 Energy is 1.07 times less risky than Weiss Korea. The stock trades about -0.19 of its potential returns per unit of risk. The Weiss Korea Opportunity is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  14,450  in Weiss Korea Opportunity on December 1, 2024 and sell it today you would earn a total of  1,423  from holding Weiss Korea Opportunity or generate 9.85% return on investment over 90 days.

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

88 Energy  vs.  Weiss Korea Opportunity

88 Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days 88 Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Weiss Korea Opportunity

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Weiss Korea Opportunity are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Weiss Korea may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with 88 Energy and Weiss Korea

The main advantage of trading using opposite 88 Energy and Weiss Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 88 Energy position performs unexpectedly, Weiss Korea 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 Weiss Korea will offset losses from the drop in Weiss Korea's long position.

The idea behind 88 Energy and Weiss Korea Opportunity 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.