Correlation Between Manaris Corp and WB Burgers

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

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

Diversification Opportunities for Manaris Corp and WB Burgers

0.0

Correlation Coefficient

Manaris Corp  WB Burgers

Pay attention - limited upside

The 3 months correlation between Manaris and WBBA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Manaris Corp and WB Burgers Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WB Burgers Asia and Manaris Corp 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 Manaris Corp are associated (or correlated) with WB Burgers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WB Burgers Asia has no effect on the direction of Manaris Corp i.e., Manaris Corp and WB Burgers go up and down completely randomly.

Pair Corralation between Manaris Corp and WB Burgers

Given the investment horizon of 90 days Manaris Corp is expected to generate 8.52 times less return on investment than WB Burgers. But when comparing it to its historical volatility, Manaris Corp is 2.74 times less risky than WB Burgers. It trades about 0.04 of its potential returns per unit of risk. WB Burgers Asia is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  365.00  in WB Burgers Asia on October 11, 2024 and sell it today you would lose (325.00) from holding WB Burgers Asia or give up 89.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	69.7%
Values	Daily Returns

Manaris Corp  vs.  WB Burgers Asia

Manaris Corp

Risk-Adjusted Performance

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Very Weak

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

WB Burgers Asia

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Manaris Corp and WB Burgers

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

The idea behind Manaris Corp and WB Burgers Asia 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.