Correlation Between Ameresco and WSP Global

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

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

Diversification Opportunities for Ameresco and WSP Global

0.44

Correlation Coefficient

Ameresco  WSP Global

Very weak diversification

The 3 months correlation between Ameresco and WSP is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ameresco and WSP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WSP Global and Ameresco 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 Ameresco are associated (or correlated) with WSP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WSP Global has no effect on the direction of Ameresco i.e., Ameresco and WSP Global go up and down completely randomly.

Pair Corralation between Ameresco and WSP Global

Given the investment horizon of 90 days Ameresco is expected to generate 2.91 times more return on investment than WSP Global. However, Ameresco is 2.91 times more volatile than WSP Global. It trades about 0.04 of its potential returns per unit of risk. WSP Global is currently generating about -0.14 per unit of risk. If you would invest  2,659  in Ameresco on October 11, 2024 and sell it today you would earn a total of  51.00  from holding Ameresco or generate 1.92% return on investment over 90 days.

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

Ameresco  vs.  WSP Global

Ameresco

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ameresco 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 basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

WSP Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WSP Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, WSP Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ameresco and WSP Global

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

The idea behind Ameresco and WSP Global 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..