Correlation Between Iargento and Wesure Global

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

By analyzing existing cross correlation between Iargento Hi Tech and Wesure Global Tech, you can compare the effects of market volatilities on Iargento and Wesure 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 Iargento with a short position of Wesure Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iargento and Wesure Global.

Diversification Opportunities for Iargento and Wesure Global

-0.18

Correlation Coefficient

Iargento  Wesure Global

Good diversification

The 3 months correlation between Iargento and Wesure is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Iargento Hi Tech and Wesure Global Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesure Global Tech and Iargento 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 Iargento Hi Tech are associated (or correlated) with Wesure Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesure Global Tech has no effect on the direction of Iargento i.e., Iargento and Wesure Global go up and down completely randomly.

Pair Corralation between Iargento and Wesure Global

Assuming the 90 days trading horizon Iargento Hi Tech is expected to under-perform the Wesure Global. In addition to that, Iargento is 1.54 times more volatile than Wesure Global Tech. It trades about -0.02 of its total potential returns per unit of risk. Wesure Global Tech is currently generating about 0.43 per unit of volatility. If you would invest  30,820  in Wesure Global Tech on September 1, 2024 and sell it today you would earn a total of  18,920  from holding Wesure Global Tech or generate 61.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.87%
Values	Daily Returns

Iargento Hi Tech  vs.  Wesure Global Tech

Iargento Hi Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iargento Hi Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Iargento is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Wesure Global Tech

Risk-Adjusted Performance

33 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Wesure Global Tech are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wesure Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iargento and Wesure Global

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

The idea behind Iargento Hi Tech and Wesure Global Tech 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.