Correlation Between Waldencast Acquisition and Wirecard

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

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

Diversification Opportunities for Waldencast Acquisition and Wirecard

0.21

Correlation Coefficient

Waldencast Acquisition  Wirecard

Modest diversification

The 3 months correlation between Waldencast and Wirecard is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Waldencast Acquisition Corp and Wirecard AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wirecard AG and Waldencast Acquisition 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 Waldencast Acquisition Corp are associated (or correlated) with Wirecard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wirecard AG has no effect on the direction of Waldencast Acquisition i.e., Waldencast Acquisition and Wirecard go up and down completely randomly.

Pair Corralation between Waldencast Acquisition and Wirecard

If you would invest  344.00  in Waldencast Acquisition Corp on September 22, 2024 and sell it today you would earn a total of  21.00  from holding Waldencast Acquisition Corp or generate 6.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Waldencast Acquisition Corp  vs.  Wirecard AG

Waldencast Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Waldencast Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Waldencast Acquisition is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Wirecard AG

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wirecard AG are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal fundamental indicators, Wirecard reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Waldencast Acquisition and Wirecard

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

The idea behind Waldencast Acquisition Corp and Wirecard AG 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.