Correlation Between Wiziboat and Winfarm

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

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

Diversification Opportunities for Wiziboat and Winfarm

0.76

Correlation Coefficient

Wiziboat  Winfarm

Poor diversification

The 3 months correlation between Wiziboat and Winfarm is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Wiziboat SA and Winfarm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winfarm and Wiziboat 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 Wiziboat SA are associated (or correlated) with Winfarm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winfarm has no effect on the direction of Wiziboat i.e., Wiziboat and Winfarm go up and down completely randomly.

Pair Corralation between Wiziboat and Winfarm

Assuming the 90 days trading horizon Wiziboat SA is expected to generate 1.19 times more return on investment than Winfarm. However, Wiziboat is 1.19 times more volatile than Winfarm. It trades about 0.0 of its potential returns per unit of risk. Winfarm is currently generating about -0.06 per unit of risk. If you would invest  830.00  in Wiziboat SA on September 30, 2024 and sell it today you would lose (265.00) from holding Wiziboat SA or give up 31.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.06%
Values	Daily Returns

Wiziboat SA  vs.  Winfarm

Wiziboat SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wiziboat SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Winfarm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Winfarm has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Wiziboat and Winfarm

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

The idea behind Wiziboat SA and Winfarm 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.