Correlation Between Leo Global and WICE Logistics

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

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

Diversification Opportunities for Leo Global and WICE Logistics

0.96

Correlation Coefficient

Leo Global  WICE Logistics

Almost no diversification

The 3 months correlation between Leo and WICE is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Leo Global Logistics and WICE Logistics PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WICE Logistics PCL and Leo Global 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 Leo Global Logistics are associated (or correlated) with WICE Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WICE Logistics PCL has no effect on the direction of Leo Global i.e., Leo Global and WICE Logistics go up and down completely randomly.

Pair Corralation between Leo Global and WICE Logistics

Assuming the 90 days trading horizon Leo Global Logistics is expected to generate 0.65 times more return on investment than WICE Logistics. However, Leo Global Logistics is 1.54 times less risky than WICE Logistics. It trades about -0.17 of its potential returns per unit of risk. WICE Logistics PCL is currently generating about -0.13 per unit of risk. If you would invest  444.00  in Leo Global Logistics on September 23, 2024 and sell it today you would lose (154.00) from holding Leo Global Logistics or give up 34.68% of portfolio value over 90 days.

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

Leo Global Logistics  vs.  WICE Logistics PCL

Leo Global Logistics

Risk-Adjusted Performance

0 of 100

Very Weak

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

WICE Logistics PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WICE Logistics PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Leo Global and WICE Logistics

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

The idea behind Leo Global Logistics and WICE Logistics PCL 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..