Correlation Between Integral and Wilhelmina

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

By analyzing existing cross correlation between Integral Ad Science and Wilhelmina, you can compare the effects of market volatilities on Integral and Wilhelmina 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 Integral with a short position of Wilhelmina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and Wilhelmina.

Diversification Opportunities for Integral and Wilhelmina

-0.45

Correlation Coefficient

Integral  Wilhelmina

Very good diversification

The 3 months correlation between Integral and Wilhelmina is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and Wilhelmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilhelmina and Integral 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 Integral Ad Science are associated (or correlated) with Wilhelmina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilhelmina has no effect on the direction of Integral i.e., Integral and Wilhelmina go up and down completely randomly.

Pair Corralation between Integral and Wilhelmina

Considering the 90-day investment horizon Integral Ad Science is expected to under-perform the Wilhelmina. But the stock apears to be less risky and, when comparing its historical volatility, Integral Ad Science is 1.74 times less risky than Wilhelmina. The stock trades about -0.09 of its potential returns per unit of risk. The Wilhelmina is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  324.00  in Wilhelmina on October 6, 2024 and sell it today you would earn a total of  27.00  from holding Wilhelmina or generate 8.33% return on investment over 90 days.

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

Integral Ad Science  vs.  Wilhelmina

Integral Ad Science

Risk-Adjusted Performance

3 of 100

Insignificant

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

Wilhelmina

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilhelmina has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Wilhelmina is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Integral and Wilhelmina

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

The idea behind Integral Ad Science and Wilhelmina 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.

Check out your portfolio center.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.