Correlation Between ThredUp and Whiting Petroleum

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

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

Diversification Opportunities for ThredUp and Whiting Petroleum

-0.58

Correlation Coefficient

ThredUp  Whiting Petroleum

Excellent diversification

The 3 months correlation between ThredUp and Whiting is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding ThredUp and Whiting Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whiting Petroleum and ThredUp 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 ThredUp are associated (or correlated) with Whiting Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whiting Petroleum has no effect on the direction of ThredUp i.e., ThredUp and Whiting Petroleum go up and down completely randomly.

Pair Corralation between ThredUp and Whiting Petroleum

Given the investment horizon of 90 days ThredUp is expected to generate 0.52 times more return on investment than Whiting Petroleum. However, ThredUp is 1.91 times less risky than Whiting Petroleum. It trades about 0.22 of its potential returns per unit of risk. Whiting Petroleum is currently generating about -0.06 per unit of risk. If you would invest  93.00  in ThredUp on October 9, 2024 and sell it today you would earn a total of  55.00  from holding ThredUp or generate 59.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.5%
Values	Daily Returns

ThredUp  vs.  Whiting Petroleum

ThredUp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ThredUp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, ThredUp reported solid returns over the last few months and may actually be approaching a breakup point.

Whiting Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Whiting Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's fundamental drivers remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with ThredUp and Whiting Petroleum

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

The idea behind ThredUp and Whiting Petroleum 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.