Correlation Between Credit Clear and Wt Financial

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

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

Diversification Opportunities for Credit Clear and Wt Financial

-0.18

Correlation Coefficient

Credit Clear  Wt Financial

Good diversification

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

Pair Corralation between Credit Clear and Wt Financial

Assuming the 90 days trading horizon Credit Clear is expected to generate 1.24 times more return on investment than Wt Financial. However, Credit Clear is 1.24 times more volatile than Wt Financial Group. It trades about 0.05 of its potential returns per unit of risk. Wt Financial Group is currently generating about 0.04 per unit of risk. If you would invest  22.00  in Credit Clear on October 4, 2024 and sell it today you would earn a total of  11.00  from holding Credit Clear or generate 50.0% return on investment over 90 days.

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

Credit Clear  vs.  Wt Financial Group

Credit Clear

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Credit Clear are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Credit Clear is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Wt Financial Group

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wt Financial Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Wt Financial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Credit Clear and Wt Financial

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

The idea behind Credit Clear and Wt Financial Group 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.