Correlation Between Davis Commodities and WEBUY GLOBAL

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

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

Diversification Opportunities for Davis Commodities and WEBUY GLOBAL

0.71

Correlation Coefficient

Davis Commodities  WEBUY GLOBAL

Poor diversification

The 3 months correlation between Davis and WEBUY is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Davis Commodities Limited 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 Davis Commodities 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 Davis Commodities Limited 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 Davis Commodities i.e., Davis Commodities and WEBUY GLOBAL go up and down completely randomly.

Pair Corralation between Davis Commodities and WEBUY GLOBAL

Given the investment horizon of 90 days Davis Commodities Limited is expected to under-perform the WEBUY GLOBAL. But the stock apears to be less risky and, when comparing its historical volatility, Davis Commodities Limited is 5.65 times less risky than WEBUY GLOBAL. The stock trades about -0.07 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  17.00  in WEBUY GLOBAL LTD on December 28, 2024 and sell it today you would lose (12.60) from holding WEBUY GLOBAL LTD or give up 74.12% of portfolio value over 90 days.

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

Davis Commodities Limited  vs.  WEBUY GLOBAL LTD

Davis Commodities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Davis Commodities Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

WEBUY GLOBAL LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days WEBUY GLOBAL LTD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Davis Commodities and WEBUY GLOBAL

The main advantage of trading using opposite Davis Commodities and WEBUY GLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Davis Commodities 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 Davis Commodities Limited 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.