Correlation Between SQ Old and Willdan

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

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

Diversification Opportunities for SQ Old and Willdan

0.0

Correlation Coefficient

SQ Old  Willdan

Pay attention - limited upside

The 3 months correlation between SQ Old and Willdan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SQ Old and Willdan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willdan Group and SQ Old 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 SQ Old are associated (or correlated) with Willdan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willdan Group has no effect on the direction of SQ Old i.e., SQ Old and Willdan go up and down completely randomly.

Pair Corralation between SQ Old and Willdan

If you would invest  3,877  in Willdan Group on December 19, 2024 and sell it today you would earn a total of  315.00  from holding Willdan Group or generate 8.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SQ Old  vs.  Willdan Group

SQ Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days SQ Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, SQ Old is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Willdan Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Willdan Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Willdan displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SQ Old and Willdan

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

The idea behind SQ Old and Willdan Group 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.