Correlation Between Bewhere Holdings and Edgewater Wireless

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

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

Diversification Opportunities for Bewhere Holdings and Edgewater Wireless

-0.14

Correlation Coefficient

Bewhere Holdings  Edgewater Wireless

Good diversification

The 3 months correlation between Bewhere and Edgewater is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bewhere Holdings and Edgewater Wireless Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewater Wireless and Bewhere Holdings 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 Bewhere Holdings are associated (or correlated) with Edgewater Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewater Wireless has no effect on the direction of Bewhere Holdings i.e., Bewhere Holdings and Edgewater Wireless go up and down completely randomly.

Pair Corralation between Bewhere Holdings and Edgewater Wireless

Assuming the 90 days horizon Bewhere Holdings is expected to generate 7.1 times less return on investment than Edgewater Wireless. But when comparing it to its historical volatility, Bewhere Holdings is 2.06 times less risky than Edgewater Wireless. It trades about 0.01 of its potential returns per unit of risk. Edgewater Wireless Systems is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2.99  in Edgewater Wireless Systems on September 4, 2024 and sell it today you would lose (0.09) from holding Edgewater Wireless Systems or give up 3.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Bewhere Holdings  vs.  Edgewater Wireless Systems

Bewhere Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bewhere Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Bewhere Holdings is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Edgewater Wireless

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Edgewater Wireless Systems are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Edgewater Wireless reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bewhere Holdings and Edgewater Wireless

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

The idea behind Bewhere Holdings and Edgewater Wireless Systems 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.