Correlation Between Coty and Waystar Holding

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

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

Diversification Opportunities for Coty and Waystar Holding

-0.3

Correlation Coefficient

Coty  Waystar Holding

Very good diversification

The 3 months correlation between Coty and Waystar is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Coty Inc and Waystar Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waystar Holding Corp and Coty 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 Coty Inc are associated (or correlated) with Waystar Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waystar Holding Corp has no effect on the direction of Coty i.e., Coty and Waystar Holding go up and down completely randomly.

Pair Corralation between Coty and Waystar Holding

Given the investment horizon of 90 days Coty Inc is expected to under-perform the Waystar Holding. But the stock apears to be less risky and, when comparing its historical volatility, Coty Inc is 1.07 times less risky than Waystar Holding. The stock trades about -0.15 of its potential returns per unit of risk. The Waystar Holding Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  3,792  in Waystar Holding Corp on December 27, 2024 and sell it today you would lose (24.00) from holding Waystar Holding Corp or give up 0.63% of portfolio value over 90 days.

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

Coty Inc  vs.  Waystar Holding Corp

Coty Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Coty Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Waystar Holding Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Coty and Waystar Holding

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

The idea behind Coty Inc and Waystar Holding Corp 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.