Correlation Between Target and WEBUY GLOBAL

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

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

Diversification Opportunities for Target and WEBUY GLOBAL

-0.34

Correlation Coefficient

Target  WEBUY GLOBAL

Very good diversification

The 3 months correlation between Target and WEBUY is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Target and WEBUY GLOBAL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBUY GLOBAL LTD and Target 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 Target are associated (or correlated) with WEBUY GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEBUY GLOBAL LTD has no effect on the direction of Target i.e., Target and WEBUY GLOBAL go up and down completely randomly.

Pair Corralation between Target and WEBUY GLOBAL

Considering the 90-day investment horizon Target is expected to under-perform the WEBUY GLOBAL. But the stock apears to be less risky and, when comparing its historical volatility, Target is 5.21 times less risky than WEBUY GLOBAL. The stock trades about -0.05 of its potential returns per unit of risk. The WEBUY GLOBAL LTD is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  12.00  in WEBUY GLOBAL LTD on September 3, 2024 and sell it today you would earn a total of  8.00  from holding WEBUY GLOBAL LTD or generate 66.67% return on investment over 90 days.

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

Target  vs.  WEBUY GLOBAL LTD

Target

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Target has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

WEBUY GLOBAL LTD

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WEBUY GLOBAL LTD are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, WEBUY GLOBAL showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Target and WEBUY GLOBAL

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

The idea behind Target and WEBUY GLOBAL LTD 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.