Correlation Between Winfarm and Omer Decugis

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

By analyzing existing cross correlation between Winfarm and Omer Decugis Cie, you can compare the effects of market volatilities on Winfarm and Omer Decugis 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 Omer Decugis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winfarm and Omer Decugis.

Diversification Opportunities for Winfarm and Omer Decugis

-0.18

Correlation Coefficient

Winfarm  Omer Decugis

Good diversification

The 3 months correlation between Winfarm and Omer is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Winfarm and Omer Decugis Cie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omer Decugis Cie 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 Omer Decugis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omer Decugis Cie has no effect on the direction of Winfarm i.e., Winfarm and Omer Decugis go up and down completely randomly.

Pair Corralation between Winfarm and Omer Decugis

Assuming the 90 days trading horizon Winfarm is expected to generate 1.57 times more return on investment than Omer Decugis. However, Winfarm is 1.57 times more volatile than Omer Decugis Cie. It trades about -0.02 of its potential returns per unit of risk. Omer Decugis Cie is currently generating about -0.04 per unit of risk. If you would invest  430.00  in Winfarm on September 16, 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Winfarm  vs.  Omer Decugis Cie

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.

Omer Decugis Cie

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omer Decugis Cie has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Omer Decugis is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Winfarm and Omer Decugis

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

The idea behind Winfarm and Omer Decugis Cie 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.