Correlation Between Stonex and Perella Weinberg

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

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

Diversification Opportunities for Stonex and Perella Weinberg

-0.09

Correlation Coefficient

Stonex  Perella Weinberg

Good diversification

The 3 months correlation between Stonex and Perella is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Stonex Group and Perella Weinberg Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perella Weinberg Partners and Stonex 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 Stonex Group are associated (or correlated) with Perella Weinberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perella Weinberg Partners has no effect on the direction of Stonex i.e., Stonex and Perella Weinberg go up and down completely randomly.

Pair Corralation between Stonex and Perella Weinberg

Given the investment horizon of 90 days Stonex Group is expected to generate 0.8 times more return on investment than Perella Weinberg. However, Stonex Group is 1.25 times less risky than Perella Weinberg. It trades about 0.13 of its potential returns per unit of risk. Perella Weinberg Partners is currently generating about -0.06 per unit of risk. If you would invest  10,476  in Stonex Group on December 1, 2024 and sell it today you would earn a total of  1,591  from holding Stonex Group or generate 15.19% return on investment over 90 days.

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

Stonex Group  vs.  Perella Weinberg Partners

Stonex Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stonex Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Stonex showed solid returns over the last few months and may actually be approaching a breakup point.

Perella Weinberg Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perella Weinberg Partners 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.

Pair Trading with Stonex and Perella Weinberg

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

The idea behind Stonex Group and Perella Weinberg Partners 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.