Correlation Between Driven Brands and WEBUY GLOBAL

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

By analyzing existing cross correlation between Driven Brands Holdings and WEBUY GLOBAL LTD, you can compare the effects of market volatilities on Driven Brands and WEBUY GLOBAL 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 Driven Brands with a short position of WEBUY GLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Driven Brands and WEBUY GLOBAL.

Diversification Opportunities for Driven Brands and WEBUY GLOBAL

0.81

Correlation Coefficient

Driven Brands  WEBUY GLOBAL

Very poor diversification

The 3 months correlation between Driven and WEBUY is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Driven Brands Holdings and WEBUY GLOBAL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBUY GLOBAL LTD and Driven Brands 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 Driven Brands Holdings are associated (or correlated) with WEBUY GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEBUY GLOBAL LTD has no effect on the direction of Driven Brands i.e., Driven Brands and WEBUY GLOBAL go up and down completely randomly.

Pair Corralation between Driven Brands and WEBUY GLOBAL

Given the investment horizon of 90 days Driven Brands Holdings is expected to under-perform the WEBUY GLOBAL. But the etf apears to be less risky and, when comparing its historical volatility, Driven Brands Holdings is 5.81 times less risky than WEBUY GLOBAL. The etf trades about -0.14 of its potential returns per unit of risk. The WEBUY GLOBAL LTD is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  19.00  in WEBUY GLOBAL LTD on October 4, 2024 and sell it today you would lose (1.70) from holding WEBUY GLOBAL LTD or give up 8.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.45%
Values	Daily Returns

Driven Brands Holdings  vs.  WEBUY GLOBAL LTD

Driven Brands Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Driven Brands Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Driven Brands may actually be approaching a critical reversion point that can send shares even higher in February 2025.

WEBUY GLOBAL LTD

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in WEBUY GLOBAL LTD are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, WEBUY GLOBAL showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Driven Brands and WEBUY GLOBAL

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

The idea behind Driven Brands Holdings and WEBUY GLOBAL LTD 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.