Correlation Between TRADEDOUBLER and WOOLWORTHS HLDGS

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

By analyzing existing cross correlation between TRADEDOUBLER AB SK and WOOLWORTHS HLDGS, you can compare the effects of market volatilities on TRADEDOUBLER and WOOLWORTHS HLDGS 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 TRADEDOUBLER with a short position of WOOLWORTHS HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEDOUBLER and WOOLWORTHS HLDGS.

Diversification Opportunities for TRADEDOUBLER and WOOLWORTHS HLDGS

-0.02

Correlation Coefficient

TRADEDOUBLER  WOOLWORTHS HLDGS

Good diversification

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

Pair Corralation between TRADEDOUBLER and WOOLWORTHS HLDGS

Assuming the 90 days horizon TRADEDOUBLER AB SK is expected to generate 1.71 times more return on investment than WOOLWORTHS HLDGS. However, TRADEDOUBLER is 1.71 times more volatile than WOOLWORTHS HLDGS. It trades about 0.01 of its potential returns per unit of risk. WOOLWORTHS HLDGS is currently generating about -0.17 per unit of risk. If you would invest  27.00  in TRADEDOUBLER AB SK on October 5, 2024 and sell it today you would earn a total of  0.00  from holding TRADEDOUBLER AB SK or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

TRADEDOUBLER AB SK  vs.  WOOLWORTHS HLDGS

TRADEDOUBLER AB SK

Risk-Adjusted Performance

0 of 100

Weak

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

WOOLWORTHS HLDGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WOOLWORTHS HLDGS 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 sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with TRADEDOUBLER and WOOLWORTHS HLDGS

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

The idea behind TRADEDOUBLER AB SK and WOOLWORTHS HLDGS 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.