Correlation Between Investment and White Pearl

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

By analyzing existing cross correlation between Investment AB Oresund and White Pearl Technology, you can compare the effects of market volatilities on Investment and White Pearl 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 Investment with a short position of White Pearl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and White Pearl.

Diversification Opportunities for Investment and White Pearl

-0.5

Correlation Coefficient

Investment  White Pearl

Very good diversification

The 3 months correlation between Investment and White is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Investment AB Oresund and White Pearl Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on White Pearl Technology and Investment 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 Investment AB Oresund are associated (or correlated) with White Pearl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of White Pearl Technology has no effect on the direction of Investment i.e., Investment and White Pearl go up and down completely randomly.

Pair Corralation between Investment and White Pearl

Assuming the 90 days trading horizon Investment AB Oresund is expected to under-perform the White Pearl. But the stock apears to be less risky and, when comparing its historical volatility, Investment AB Oresund is 3.5 times less risky than White Pearl. The stock trades about -0.07 of its potential returns per unit of risk. The White Pearl Technology is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  354.00  in White Pearl Technology on September 13, 2024 and sell it today you would earn a total of  228.00  from holding White Pearl Technology or generate 64.41% return on investment over 90 days.

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

Investment AB Oresund  vs.  White Pearl Technology

Investment AB Oresund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Investment AB Oresund has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

White Pearl Technology

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in White Pearl Technology are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, White Pearl sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Investment and White Pearl

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

The idea behind Investment AB Oresund and White Pearl Technology 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..