Correlation Between Winfarm and Glob Bioenergi

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

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

Diversification Opportunities for Winfarm and Glob Bioenergi

0.72

Correlation Coefficient

Winfarm  Glob Bioenergi

Poor diversification

The 3 months correlation between Winfarm and Glob is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Winfarm and Glob Bioenergi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glob Bioenergi and Winfarm 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 Winfarm are associated (or correlated) with Glob Bioenergi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glob Bioenergi has no effect on the direction of Winfarm i.e., Winfarm and Glob Bioenergi go up and down completely randomly.

Pair Corralation between Winfarm and Glob Bioenergi

Assuming the 90 days trading horizon Winfarm is expected to generate 0.25 times more return on investment than Glob Bioenergi. However, Winfarm is 4.07 times less risky than Glob Bioenergi. It trades about -0.02 of its potential returns per unit of risk. Glob Bioenergi is currently generating about -0.02 per unit of risk. If you would invest  430.00  in Winfarm on September 15, 2024 and sell it today you would lose (33.00) from holding Winfarm or give up 7.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.48%
Values	Daily Returns

Winfarm  vs.  Glob Bioenergi

Winfarm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Winfarm has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Winfarm is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Glob Bioenergi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glob Bioenergi 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 Winfarm and Glob Bioenergi

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

The idea behind Winfarm and Glob Bioenergi 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.