Correlation Between Shapeways Holdings, and WEG SA

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

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

Diversification Opportunities for Shapeways Holdings, and WEG SA

0.43

Correlation Coefficient

Shapeways Holdings,  WEG SA

Very weak diversification

The 3 months correlation between Shapeways and WEG is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Shapeways Holdings, Common and WEG SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEG SA ADR and Shapeways Holdings, 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 Shapeways Holdings, Common are associated (or correlated) with WEG SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEG SA ADR has no effect on the direction of Shapeways Holdings, i.e., Shapeways Holdings, and WEG SA go up and down completely randomly.

Pair Corralation between Shapeways Holdings, and WEG SA

If you would invest  904.00  in WEG SA ADR on October 26, 2024 and sell it today you would earn a total of  65.00  from holding WEG SA ADR or generate 7.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Shapeways Holdings, Common  vs.  WEG SA ADR

Shapeways Holdings,

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shapeways Holdings, Common are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Shapeways Holdings, showed solid returns over the last few months and may actually be approaching a breakup point.

WEG SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WEG SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, WEG SA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Shapeways Holdings, and WEG SA

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

The idea behind Shapeways Holdings, Common and WEG SA ADR 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.