Correlation Between Energy Focu and WEBUY GLOBAL

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

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

Diversification Opportunities for Energy Focu and WEBUY GLOBAL

0.21

Correlation Coefficient

Energy Focu  WEBUY GLOBAL

Modest diversification

The 3 months correlation between Energy and WEBUY is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Energy Focu 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 Energy Focu 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 Energy Focu 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 Energy Focu i.e., Energy Focu and WEBUY GLOBAL go up and down completely randomly.

Pair Corralation between Energy Focu and WEBUY GLOBAL

Given the investment horizon of 90 days Energy Focu is expected to under-perform the WEBUY GLOBAL. But the stock apears to be less risky and, when comparing its historical volatility, Energy Focu is 3.52 times less risky than WEBUY GLOBAL. The stock trades about -0.4 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	Very Weak
Accuracy	95.45%
Values	Daily Returns

Energy Focu  vs.  WEBUY GLOBAL LTD

Energy Focu

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Energy Focu are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Energy Focu is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

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 Energy Focu and WEBUY GLOBAL

The main advantage of trading using opposite Energy Focu and WEBUY GLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Focu 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 Energy Focu 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.