Correlation Between Minor International and Workpoint Entertainment

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

By analyzing existing cross correlation between Minor International Public and Workpoint Entertainment Public, you can compare the effects of market volatilities on Minor International and Workpoint Entertainment 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 Minor International with a short position of Workpoint Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minor International and Workpoint Entertainment.

Diversification Opportunities for Minor International and Workpoint Entertainment

0.12

Correlation Coefficient

Minor International  Workpoint Entertainment

Average diversification

The 3 months correlation between Minor and Workpoint is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Minor International Public and Workpoint Entertainment Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workpoint Entertainment and Minor International 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 Minor International Public are associated (or correlated) with Workpoint Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workpoint Entertainment has no effect on the direction of Minor International i.e., Minor International and Workpoint Entertainment go up and down completely randomly.

Pair Corralation between Minor International and Workpoint Entertainment

Assuming the 90 days trading horizon Minor International Public is expected to generate 0.78 times more return on investment than Workpoint Entertainment. However, Minor International Public is 1.29 times less risky than Workpoint Entertainment. It trades about 0.04 of its potential returns per unit of risk. Workpoint Entertainment Public is currently generating about -0.13 per unit of risk. If you would invest  2,625  in Minor International Public on December 24, 2024 and sell it today you would earn a total of  100.00  from holding Minor International Public or generate 3.81% return on investment over 90 days.

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

Minor International Public  vs.  Workpoint Entertainment Public

Minor International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Minor International Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Minor International is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Workpoint Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Workpoint Entertainment Public 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Minor International and Workpoint Entertainment

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

The idea behind Minor International Public and Workpoint Entertainment Public 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.