Correlation Between Wallix Group and Vergnet

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

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

Diversification Opportunities for Wallix Group and Vergnet

-0.68

Correlation Coefficient

Wallix Group  Vergnet

Excellent diversification

The 3 months correlation between Wallix and Vergnet is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Wallix Group SA and Vergnet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vergnet and Wallix Group 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 Wallix Group SA are associated (or correlated) with Vergnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vergnet has no effect on the direction of Wallix Group i.e., Wallix Group and Vergnet go up and down completely randomly.

Pair Corralation between Wallix Group and Vergnet

Assuming the 90 days trading horizon Wallix Group SA is expected to generate 0.28 times more return on investment than Vergnet. However, Wallix Group SA is 3.57 times less risky than Vergnet. It trades about 0.06 of its potential returns per unit of risk. Vergnet is currently generating about -0.45 per unit of risk. If you would invest  908.00  in Wallix Group SA on September 29, 2024 and sell it today you would earn a total of  67.00  from holding Wallix Group SA or generate 7.38% return on investment over 90 days.

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

Wallix Group SA  vs.  Vergnet

Wallix Group SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wallix Group SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Wallix Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vergnet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vergnet has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Wallix Group and Vergnet

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

The idea behind Wallix Group SA and Vergnet 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.