Correlation Between FEMALE HEALTH and Wizz Air

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

By analyzing existing cross correlation between FEMALE HEALTH and Wizz Air Holdings, you can compare the effects of market volatilities on FEMALE HEALTH and Wizz Air 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 FEMALE HEALTH with a short position of Wizz Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and Wizz Air.

Diversification Opportunities for FEMALE HEALTH and Wizz Air

-0.54

Correlation Coefficient

FEMALE HEALTH  Wizz Air

Excellent diversification

The 3 months correlation between FEMALE and Wizz is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH and Wizz Air Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wizz Air Holdings and FEMALE HEALTH 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 FEMALE HEALTH are associated (or correlated) with Wizz Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wizz Air Holdings has no effect on the direction of FEMALE HEALTH i.e., FEMALE HEALTH and Wizz Air go up and down completely randomly.

Pair Corralation between FEMALE HEALTH and Wizz Air

Assuming the 90 days trading horizon FEMALE HEALTH is expected to under-perform the Wizz Air. In addition to that, FEMALE HEALTH is 1.07 times more volatile than Wizz Air Holdings. It trades about -0.06 of its total potential returns per unit of risk. Wizz Air Holdings is currently generating about 0.04 per unit of volatility. If you would invest  1,422  in Wizz Air Holdings on September 5, 2024 and sell it today you would earn a total of  94.00  from holding Wizz Air Holdings or generate 6.61% return on investment over 90 days.

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

FEMALE HEALTH  vs.  Wizz Air Holdings

FEMALE HEALTH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FEMALE HEALTH has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Wizz Air Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wizz Air Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Wizz Air may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with FEMALE HEALTH and Wizz Air

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

The idea behind FEMALE HEALTH and Wizz Air Holdings 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.