Correlation Between Discount Print and Wilhelmina

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

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

Diversification Opportunities for Discount Print and Wilhelmina

-0.45

Correlation Coefficient

Discount Print  Wilhelmina

Very good diversification

The 3 months correlation between Discount and Wilhelmina is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Discount Print USA and Wilhelmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilhelmina and Discount Print 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 Discount Print USA are associated (or correlated) with Wilhelmina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilhelmina has no effect on the direction of Discount Print i.e., Discount Print and Wilhelmina go up and down completely randomly.

Pair Corralation between Discount Print and Wilhelmina

Given the investment horizon of 90 days Discount Print USA is expected to under-perform the Wilhelmina. In addition to that, Discount Print is 4.82 times more volatile than Wilhelmina. It trades about -0.03 of its total potential returns per unit of risk. Wilhelmina is currently generating about -0.03 per unit of volatility. If you would invest  382.00  in Wilhelmina on October 5, 2024 and sell it today you would lose (31.00) from holding Wilhelmina or give up 8.12% of portfolio value over 90 days.

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

Discount Print USA  vs.  Wilhelmina

Discount Print USA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Discount Print USA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly sluggish basic indicators, Discount Print demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Wilhelmina

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilhelmina has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Wilhelmina is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Discount Print and Wilhelmina

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

The idea behind Discount Print USA and Wilhelmina 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.