Correlation Between Oblong and WiSA Technologies

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

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

Diversification Opportunities for Oblong and WiSA Technologies

0.02

Correlation Coefficient

Oblong  WiSA Technologies

Significant diversification

The 3 months correlation between Oblong and WiSA is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Oblong Inc and WiSA Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WiSA Technologies and Oblong 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 Oblong Inc are associated (or correlated) with WiSA Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WiSA Technologies has no effect on the direction of Oblong i.e., Oblong and WiSA Technologies go up and down completely randomly.

Pair Corralation between Oblong and WiSA Technologies

Given the investment horizon of 90 days Oblong Inc is expected to generate 0.62 times more return on investment than WiSA Technologies. However, Oblong Inc is 1.62 times less risky than WiSA Technologies. It trades about -0.02 of its potential returns per unit of risk. WiSA Technologies is currently generating about -0.04 per unit of risk. If you would invest  8,840  in Oblong Inc on September 25, 2024 and sell it today you would lose (8,487) from holding Oblong Inc or give up 96.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Oblong Inc  vs.  WiSA Technologies

Oblong Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oblong Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Oblong is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

WiSA Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WiSA Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Oblong and WiSA Technologies

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

The idea behind Oblong Inc and WiSA Technologies 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.