Correlation Between Wah Nobel and First Fidelity
Can any of the company-specific risk be diversified away by investing in both Wah Nobel and First Fidelity 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 Wah Nobel and First Fidelity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wah Nobel Chemicals and First Fidelity Leasing, you can compare the effects of market volatilities on Wah Nobel and First Fidelity 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 Wah Nobel with a short position of First Fidelity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wah Nobel and First Fidelity.
Diversification Opportunities for Wah Nobel and First Fidelity
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wah and First is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Wah Nobel Chemicals and First Fidelity Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Fidelity Leasing and Wah Nobel 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 Wah Nobel Chemicals are associated (or correlated) with First Fidelity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Fidelity Leasing has no effect on the direction of Wah Nobel i.e., Wah Nobel and First Fidelity go up and down completely randomly.
Pair Corralation between Wah Nobel and First Fidelity
Assuming the 90 days trading horizon Wah Nobel Chemicals is expected to generate 0.47 times more return on investment than First Fidelity. However, Wah Nobel Chemicals is 2.13 times less risky than First Fidelity. It trades about 0.07 of its potential returns per unit of risk. First Fidelity Leasing is currently generating about 0.02 per unit of risk. If you would invest 21,101 in Wah Nobel Chemicals on October 24, 2024 and sell it today you would earn a total of 2,577 from holding Wah Nobel Chemicals or generate 12.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 91.94% |
Values | Daily Returns |
Wah Nobel Chemicals vs. First Fidelity Leasing
Performance |
Timeline |
Wah Nobel Chemicals |
First Fidelity Leasing |
Wah Nobel and First Fidelity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wah Nobel and First Fidelity
The main advantage of trading using opposite Wah Nobel and First Fidelity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wah Nobel position performs unexpectedly, First Fidelity 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 First Fidelity will offset losses from the drop in First Fidelity's long position.Wah Nobel vs. Shifa International Hospitals | Wah Nobel vs. Air Link Communication | Wah Nobel vs. Fauji Foods | Wah Nobel vs. Hi Tech Lubricants |
First Fidelity vs. Masood Textile Mills | First Fidelity vs. Fauji Foods | First Fidelity vs. KSB Pumps | First Fidelity vs. Mari Petroleum |
Check out your portfolio center.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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |